Preamble

The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.

Oral Answers to Questions — UNEMPLOYMENT.

STATISTICS.

Mr. Craven-Ellis: asked the Minister of Labour what is the approximate percentage of the 60,481 increase in the number of the unemployed for July attributable to the policy of restricting the sale of consumable goods; and why this restriction is imposed at a time when there are 827,266 able-bodied persons registered as unemployed?

The Minister of Labour (Mr. Ernest Bevin): The information asked for in the first part of the Question is not available. With regard to the second part, I would remind my hon. Friend that there are other matters than the use of labour governing this policy as has been made clear by my light hon. Friend the President of the Board of Trade and by my hon. Friend the Parliamentary Secretary to the Board of Trade in reply to Questions by the hon. Member for Seaham (Mr. Shinwell) and the hon. Member for West-houghton (Mr. Rhys Davies) on 6th June and 23rd July.

Mr. Craven-Ellis: If my right hon. Friend is unable to give any information on the first part of the Question, how are the Government able to say whether their policy of restricting the consumption of consumable goods has succeeded or not?

Mr. Bevin: Questions as to the policy affecting the restriction of consumable goods should be addressed to the Department responsible, namely, the Board of Trade.

Mr. Craven-Ellis: I thought that my right hon. Friend was responsible for labour.

Mr. Kirkwood: asked the Minister of Labour, in view of the increase of 114,491 in the number of the unemployed in Scotland, what steps he is taking to provide employment for these people?

Mr. Bevin: The figure 114,491 is the total number of unemployed registered in Scotland on 15th July. The increase over the previous month was 3,218. This increase, some part of which was due to seasonal causes, was confined to women and juveniles. A certain amount of unemployment is to be expected during the process of transferring workers from peace-time employment to war-time industries, but I am taking steps to find other employment as rapidly as possible for persons displaced.

Mr. Kirkwood: While thanking the Minister for that reply, may I inform him that Scotsmen have a greater terror of unemployment at the moment than they have of the Germans?

Mr. Robert Gibson: Will the right hon. Gentleman deal with the question of the transfer of the workers displaced from sugar refineries?

FOREIGN ARTISTES (PERMITS).

Mr. Glenvil Hall: asked the Minister of Labour the reason which has led him to grant special permits to continental artistes to appear in this country when so many British actors and actresses are out of work?

Mr. Bevin: The number of fresh permits issued to foreign artistes since the outbreak of war is negligible. At the outbreak of the war the great majority of foreign artistes who had been working in this country under permission from my Department went abroad. The small number who, for various reasons, remained here were allowed to continue in their profession subject to their obtaining specific authority from my Department for their various engagements.

Mr. Hall: Does my right hon. Friend realise that this authority is causing a good deal of comment among out-of-work actors and actresses who are suffering great loss?

Mr. Bevin: I have not heard any adverse comment. Appreciation has been expressed to me for the work I have been doing in connection with the variety and theatre world.

Mr. Denville: Do any of the artistes referred to by the Minister belong to enemy nationality?

Mr. Granville: Will my right hon. Friend use his influence to see that E.N.S.A. give first opportunity to British artistes?

Mr. Bevin: I understand that they do.

MINERS.

Mr. Leslie: asked the Minister of Labour whether he has any information as to the number of workers now employed in the Cleveland ironstone mines; and what action has been taken to inform unemployed miners of the reopening of these mines at Lingdale, in the county of Durham?

Mr. Bevin: The latest figures I have for the number so employed is about 3,000 for the end of June. I have made special arrangements for maintaining and increasing the labour required by the ironstone mines, and unemployers miners in Durham are being transferred as far as opportunity offers. I am making inquiry with regard to the Lingdale mines.

Mr. Shinwell: asked the Minister of Labour the number of miners registered at the Employment Exchanges at Sea-ham, Horden, Wheatley Hill, and Shotton, transferred to work on munitions in the past three months?

Mr. Bevin: I am making inquiries and will write to my hon. Friend.

DOCKERS AND STEVEDORES, SOUTHAMPTON.

Mr. Viant: asked the Minister of Labour the number of dockers and stevedores registered at the Employment Exchanges in Southampton; how many idle men have applied to be sent to other parts of the country where employment is more favourable; and what action is being taken in the matter?

Mr. Bevin: I am making inquiries and will write to my hon. Friend.

INDUSTRIAL AGREEMENTS (TRADE UNIONS).

Mr. Craven-Ellis: asked the Minister of Labour whether he will amend Statutory Rules and Orders, 1940, No. 1305, and particularly Article 5 of paragraph 3,

issued under the authority of Conditions of Employment and National Arbitration Order, 1940, so that those workers who are not members of a recognised trade union may receive the full benefits of the Order?

Major-General Sir Alfred Knox: asked the Minister of Labour whether as Statutory Rules and Orders, No. 1305, Conditions of Employment and National Arbitration, Article 5, paragraph (3), safeguards the interests of trade unionists, and as there is no similar safeguard by appeal to the Minister for employés who are not trade unionists, he will take steps to remedy this injustice?

Mr. Bevin: The right under Article 5 (3) to raise questions with regard to the interpretation of such terms and conditions agreed between organisations of employers and trade unions was deliberately confined to such bodies. There is, in my opinion, no reason why it should be given to individuals. An employer or worker who does not already belong to the appropriate industrial organisation can best protect his interests by joining it; he will at the same time be contributing his part towards that joint co-operation in industry on which our war effort must largely depend.

Sir A. Knox: Will the right hon. Gentleman tell me what an employé has to do who is in an occupation which is not covered by any trade union?

Mr. Bevin: I have no knowledge of any occupation or even profession in this country that is not covered by a trade union.

Sir A. Knox: In effect, is not this Order made to force non-trade unionists into unions?

Mr. Bevin: No, Sir; the Order is meant, when two bodies have arrived at an agreement, to confine the interpretation of the agreement to the two parties which are signatories to it.

Mr. Craven-Ellis: In view of the fact that by far the greater percentage of workers are not members of trade unions, why are they to be excluded from benefit under this Order?

Mr. Bevin: It depends on what my hon. Friend means by "benefit." The benefit under an agreement is the wages which the agreement provides. I am


not aware that there is any particular benefit for an individual to have the right to interpret an agreement to which he was never a party and in the making of which he took no part. How can he interpret an agreement in the making of which he took no hand?

LONDON PASSENGER TRANSPORT BOARD (WORKING CONDITIONS, KILBURN PARK).

Dr. Morgan: asked the Minister of Labour whether the attention of his officers of the Factory Department have been drawn to the working conditions at the Kilburn Park Electric Power Substation, Alpha Place, Kilburn, of the London Passenger Transport Board, on the Bakerloo Underground line; what steps are being taken to improve the ventilation, the high temperature, and the restricted space in which the employés have to work; and whether remedial measures can be expedited?

Mr. Bevin: The question of ventilation was taken up by my Department with the Board last month, and I understand that some improvements have since been made. Factory inspectors are pursuing the matter, particularly the question of the control of the high temperature, and are making further inquiries as to whether I should be justified in intervening in the matter of space.

Oral Answers to Questions — NATIONAL WAR EFFORT.

WORKERS' EARNINGS (GOVERNMENT CONTRACTS).

Sir A. Knox: asked the Minister of Labour whether he is collecting any information as to the weekly earnings of persons engaged directly or indirectly on Government contracts; and whether he can furnish any information as to how these earnings compare with those earned by the same classes of persons prior to the outbreak of war?

Mr. Bevin: Information is being collected by my Department as to the average earnings, in one week of July, 1940, of workpeople employed in manufacturing industries generally and in some of the principal non-manufacturing industries. I do not anticipate, however, that data will be available for making the comparison with pre-war earnings desired by my hon. and gallant Friend.

Mr. Higgs: Is the Minister aware that there is a Government factory in Birmingham where girls in the early twenties are earning as much as £8 a week—[HON. MEMBERS: "Oh!"]—and does he consider that this is just and equitable to the men in the Forces? [Interruption.]

Mr. Speaker: rose—

Mr. Higgs: On a point of Order. Was I not asking a question in a proper manner? I could not be heard, owing to the interruptions on the other side of the House.

Mr. Speaker: The hon. Member was asking for the Minister's opinion. He should ask questions about facts.

TRADE UNION CARDS.

Mr. Thorne: asked the Minister of Labour whether he will give information in connection with the transference of labour and the recognition of trade union cards agreed upon by the various trade unions?

Mr. Bevin: If my hon. Friend has in mind the recognition of trade union cards by other unions, this is a matter which is not within my control and has to be settled by the trade unions themselves.

Mr. Isaacs: Is my right hon. Friend aware that very satisfactory arrangements are being made through the Trades Union Congress with all the unions affected?

Mr. Bevin: I think the Trades Union Congress is the most harmonious body in the world.

MORRIS COWLEY WORKS, OXFORD.

Mr. Sloan: asked the Minister of Labour whether he has considered the communication, dated 13th July, in connection with the position at the Morris Cowley works, Oxford; whether he is aware that many men on car production were dismissed; and whether he can state the industries to which these men were diverted?

Mr. Bevin: I am making inquiries and will write to my hon. Friend.

CANTEEN WORKERS (TRAINING).

Miss Ward: asked the Minister of Labour, in view of the fact that the Government are prepared to subsidise, through the Board of Education, a course


of training by the Women's Voluntary Services for canteen workers, who are prepared to act in a voluntary unpaid capacity, why a grant has been withheld by his Department from a body training workers who have to earn their own living?

Mr. Bevin: I am unable to identify the body from which a grant is alleged to have been withheld. Perhaps my hon. Friend will give me particulars.

Miss Ward: Is my right hon. Friend aware that if he had read the leader in the "Times," he would see what the situation is?

Mr. Bevin: I could not assume that the leader in the "Times" had any connection with this Question, because the leader was written after the Question had been put down.

Miss Ward: Is my right hon. Friend not aware that those in charge of the central training scheme for women, which has been run under the authority of his Department since the end of the last war, have handed in their resignations because the grant was withheld, and that my right hon. Friend, in answer to a Question last week, said that he was not prepared to continue the grant?

Mr. Bevin: This is too long a matter to be dealt with in an answer to a Supplementary Question, but if my hon. Friend would like to know the whole of the facts, I am prepared to send them to her in writing. I do not accept her deduction.

ENGINEERS.

Mr. Malcolm MacMillan: asked the Minister of Labour the number of men with skilled engineering experience who have applied to be placed on the Central Register and the number who have applied at Employment Exchanges; and how many of these persons have been found employment in the last three months?

Mr. Bevin: I have no figures available to show the number of applications from engineers for enrolment on the Central Register. The number of engineers enrolled on the Central Register at 31st July was 46,077. To this number there will, it is estimated, be added some 42,000

engineers who are in process of being enrolled as a result of the recent Registration Order. I should add that the great majority of these 42,000 engineers are already in employment. The number transferred to new employment through the Central Register was 596 for the three months ended 31st July, 1940. It would not be in the national interest to publish the Employment Exchange figures.

WOMEN WORKERS, LONDON.

Mr. Brooke: asked the Minister of Labour whether he is aware that the number of women in London capable of work but unable to obtain it, after steadily diminishing throughout the early months of the year, has been increasing again ever since May although the whole nation has been urged to "Go to it"; and whether he will announce at an early date his definite plans for meeting the overwhelming desire of the women of London to pull their full weight in the national war effort?

Mr. Bevin: I am aware of the recent increase in the numbers of women in London registering for employment. I appreciate that they are anxious to take their part in the war effort, and there are already several directions in which they can do so, particulars of which are brought to their notice. I would refer my hon. Friend to the statement on "Offers of Service" which I made in June last, in which I specified openings for women anxious to undertake work of national importance. I propose to continue and intensify the existing methods of putting them in touch with employment as it becomes available.

Mr. Brooke: While thanking the Minister for his answer, may I ask him whether he will further inquire into such points as the refusal of Woolwich Arsenal to consider applications for employment from women over the age of 20 years and 6 months unless they live in the immediate vicinity?

Mr. Bevin: If my hon. Friend will give me some particulars, I will certainly go into it with the Ministry of Supply.

Sir Herbert Williams: Is the right hon. Gentleman aware that there is a good deal of irritation in the London area at the repeated appeals by Ministers to women to "line up" because when they do line up the Employment Exchanges have not the faintest idea what to do with them?

Miss Ward: Will the Minister examine all the obstacles which stand in the way of the employment of women, and is he aware that there are a good many?

Mr. Bevin: I think there is a considerable number of obstacles both in the way of men and women, and one of the greatest is the war.

Mr. Lyons: Why are there these obstacles to-day, when the work of all is needed in the national effort?

Mr. Bevin: It must not be assumed that because we are at war there is available employment for every person who is being put out of employment.

Mr. Craven-Ellis: There is bad organisation.

Mr. Bevin: Perhaps the hon. Member will wait to hear the whole of my answer. I indicated when I took office that unemployment was bound to arise due to restrictions upon commercial work, and the Ministry of Labour is dependent in the matter of the absorption of labour upon the programmes, and the speed of the placing of orders under their programmes, of the other Departments. The orders which can be given out are sometimes dependent both upon manufacturing facilities and materials being ready.

Sir H. Williams: Will the right hon. Gentleman answer my question?

Mr. Bevin: I could not understand it.

Sir H. Williams: May I repeat it?

Mr. Speaker: rose—

Sir H. Williams: On a point of Order. If I put a perfectly proper question, which everybody understood—

Mr. Kirkwood: No, we did not.

Sir H. Williams: —is it in Order for a Minister to decline to attempt to answer it on the ground that he had not the capacity?

Mr. Speaker: The hon. Member has heard what the Minister said.

Mr. Kirkwood: Further to that point of Order. Is it not the case that the critics of the present Minister of Labour are part of the majority which has been in control of the conditions in this country for the last 20 years?

Sir H. Williams: What about 1931?

CONSCIENTIOUS OBJECTORS.

Mr. Sloan: asked the Minister of Labour whether he is aware that Mr. A. Anderson, Ashton, Green Street, Darvel, who was registered as a conscientious objector, received a notice from his employers, Messrs. A. Jamieson and Company, Limited, lace manufacturers, that since he had registered as a conscientious objector his services were no longer required by them; and what action does he propose to take towards the firm?

Mr. Bevin: I have no knowledge of the facts in this case. I have stated previously that I strongly deprecate action of the kind alleged, but I have no authority to control an employer's action in such circumstances.

Mr. R. Gibson: Will my right hon. Friend give the tribunals authority to deal with such a matter as being contempt of court?

Mr. Radford: Is there any objection to a British firm preferring to employ genuine British men and women rather than conscientious objectors?

Mr. Bevin: I take the view very strongly that when the House of Commons carries a law giving to any minority a right, it is wrong for any citizen to try by individual action, either by starving a man or doing anything else, to depreciate the right which this House has conferred.

Mr. Craven-Ellis: Has the right hon. Gentleman any evidence that conscientious objectors are being starved?

MESSRS. FOLLANDS, HAMBLE (EMPLOYE).

Mr. Gallacher: asked the Minister of Labour whether he will inquire into the case of Mr. Fred Ward, who recently lost his employment at Messrs. Follands, Hamble, Hampshire, following a fine of £5 imposed on him for causing an assembly in a protected place; and, as this charge was based on a discussion of two or three minutes' duration in the firm's lavatory with two other employés, one of whom was an informer, he will take steps to secure his reinstatement as the action taken against Mr. Ward bears the appearance of being an act of political victimisation?

Mr. Bevin: I am making inquiries into this matter and will communicate with the hon. Member in due course.

Oral Answers to Questions — EDUCATION.

EVACUATED CHILDREN (COMMUNAL MEALS).

Mr. David Adams: asked the President of the Board of Education what proportion of evacuated school children are being fed under arrangements for communal meals; and whether this, if satisfactory, is to be extended to all children in any areas?

The President of the Board of Education (Mr. Ramsbotham): No information is available as to the proportion of evacuated school children fed at communal feeding centres. About no new centres have been established for evacuated school children and in addition, meals for such children are in many cases being provided by an extension of existing canteen arrangements. The question of communal feeding for evacuated and other school children is fully discussed in the Board's Circular 1520, of which I am sending a copy to the hon. Member. While I should welcome a large extension of communal feeding for the classes of children mentioned in the circular and have offered substantially increased rates of grant for that purpose, the communal feeding of all school children in all areas would be impracticable on account of difficulties of premises and equipment, and it is certain that many parents, and also many householders with whom evacuated children are billeted, would not desire to take advantage of such facilities.

Mr. Adams: As the Minister will be aware that many directors of education are strongly advocating communal feeding as against meals being provided by foster parents, can he say that his Department will give all its weight in the direction of communal feeding?

Mr. Ramsbotham: The hon. Member will see from the circular, a copy of which I am sending him, that my Department have provided very substantial inducements to local authorities. We hope that they will take advantage of them.

Mr. Kenneth Lindsay: Are the 110
centres provided by local authorities or voluntary societies?

Mr. Ramsbotham: I could not say offhand.

TEACHERS (WAR BONUS).

Mr. Lipson: asked the President of the Board of Education whether he will recommend to the Burnham Committee that the war bonus to teachers below a certain income should take the form of a flat-rate increase as being more equitable and more appropriate than a percentage increase on salaries?

Mr. Ramsbotham: I understand that the Burnham Committees have already agreed upon a joint recommendation to their constituent bodies that war bonus should be granted to teachers whose salaries do not exceed a certain figure, on the basis of a uniform percentage increase on their salaries. It is not for me to make suggestions to the Committees, the function of my Department being limited to the acceptance or otherwise for grant purposes of the recommendations of the Burnham Committees.

Mr. Lipson: Since my right hon. Friend rejects this proposal, is it not possible to make suggestions under which he would approve of an alternative method? Does he think that the proposal suggested in my Question is not fairer?

Mr. Ramsbotham: I had better consider the recommendation before I express an opinion.

Mr. De la Bère: Does the Minister appreciate that many of these people have been very hard hit as a result of the war and that they need every consideration and sympathy?

STAFFS (HEAD TEACHERS' REPORTS).

Mr. Glenvil Hall: asked the President of the Board of Education whether he is aware that the Middlesex County Council has set up a committee of three persons, armed with supreme power, to consider reports made by head teachers on the loyalty of those serving under them; that individuals so reported upon are given no written information as to the charge made against them and none of the normal privileges of defence, nor have they any right of appeal against conviction; what other local authorities have established similar committees; and whether, as this action is the result of the interpretation placed by the Middlesex County Council on the Government circular issued last May, he will take


immediate steps to call the attention of this body to the undesirability of such procedure?

Mr. Ramsbotham: Local education authorities are vested by Statute with the power of appointing and dismissing teachers, and I have no means of knowing what machinery has been set up by the Middlesex authority or by any other authority with a view to terminating the appointment of teachers whose continued employment in present circumstances is regarded as undesirable. As regards the last part of the Question, the Middlesex authority have received the Board's Circular No. 1522, of which I am sending the hon. Member a copy.

Mr. Hall: Cannot my right hon. Friend bring pressure to bear on this authority through the block grant provided by the Government? Does he not think it is a shocking thing that people should be denied the ordinary rights of every individual under the law in this country, charged with an offence?

Mr. Ramsbotham: As I have said, I do not know what machinery has been set up by the Middlesex authority. The circular to which I have referred, and which this authority has received, sets out fully the principles by which they should be guided.

Mr. A. Bevan: Is not the Minister aware that local authorities have been stimulated to this course of action by certain circulars of the Ministry of Health?

Mr. Hall: If the Minister has notofficial knowledge of this matter, surely he has ordinary knowledge of it, at any rate? Will he—

Mr. Speaker: rose—

Mr. Key: asked the President of the Board of Education whether, in pursuance of the Government's view, as set out in the memorandum accompanying Circular 1522, he will make it clear to local education authorities that he does not approve the action of certain authorities in calling upon head teachers to furnish secret reports upon their staffs' political or religious views; and whether he will take steps to discourage this practice, since it is calculated to undermine the morale of the teaching profession with a consequent adverse effect on the efficiency of the teaching service?

Mr. Ramsbotham: The memorandum to which the hon. Member refers makes it clear that, in the Government's opinion, no person should be penalised for the mere holding of an opinion, and therefore that no useful purpose would be served by eliciting the views of teachers on political or religious matters. The memorandum has been communicated by my Department to local education authorities, and I see no occasion for any further action.

Mr. Key: Would not the Minister be able to take steps to secure that the secret reports already made should be ordered to be destroyed?

Mr. Ramsbotham: I think that retrospective action would be difficult. The circular to which I have referred gives very clear guidance to the local authorities on this subject.

Mr. Bevan: Is the Minister aware that very considerable dissatisfaction is caused among the staffs of local authorities by action of this kind, and that it destroys the esprit de corps of all the staffs in Great Britain to realise that one of their number should be spying on them?

Mr. Ramsbotham: Ground for many misunderstandings will be removed by this circular.

LOWESTOFT (LOAN FACILITIES).

Mr. Stephen: asked the President of the Board of Education, with regard to the agreement by the Bank of England and/or joint stock banks to finance the service of education in Lowestoft, what conditions the Bank has laid down as to the amount that shall be spent on the service of education and, in particular, of the number of teachers that shall be employed and the salaries they shall receive?

Mr. Ramsbotham: I have no knowledge of the matters referred to by the hon. Member.

Mr. Loftus: Is the Minister aware that the Corporation of Lowestoft and their officials have no knowledge whatever of the allegation contained in this Question and that they understand they can borrow from the banks upon the ordinary terms and conditions of peace-time?

Mr. Ramsbotham: Then their position is ihe same as mine.

Oral Answers to Questions — CIVIL DEFENCE.

EVACUATED CHILDREN (PARENTS' VISITS).

Mr. Sorensen: asked the Minister of Health whether he will arrange that unemployed parents of evacuated children shall receive periodical free travelling warrants to visit their children without the conditions that the children shall be ill before such warrants are granted; whether he will also arrange that free travelling warrants issued to soldiers who are parents of evacuated children shall also be available to the district where the evacuated children are living; and whether any steps can be taken to mitigate the burden on parents of evacuated children due to increased postage and other factors, by arranging for the bulk despatch of letters and parcels to suitable common distributing centres at schools or by other means?

The Minister of Health (Mr. Malcolm MacDonald): Special assistance may be granted from time to time to parents who are eligible for payments from the Assistance Board and who could not otherwise afford to visit their evacuated children, and public assistance authorities have been empowered to grant similar help to parents in receipt of relief. As regards the second part of the Question, I would refer the hon. Member to the reply given by my right hon. and gallant Friend, the then Secretary of State for War, to my hon. Friend the Member for West Lewisham (Mr. H. Brooke) on 6th February, 1940. As regards the last part of the Question, I understand that the dispatch and delivery of letters in the manner suggested would contravene the Post Office Act, 1908.

Mr. Sorensen: Does not the right hon. Gentleman appreciate that large numbers of unemployed people cannot visit their children, and can he not recommend that warrants should be granted to such parents, even when their children are not ill?

Mr. MacDonald: If the hon. Member will study the first part of my answer, he will realise that such help can be given.

Mr. Sorensen: Does the right hon. Gentleman realise that it is not being given?

BILLETING.

Mr. Channon: asked the Minister of Health by whom, in the case of compul-

sory evacuation from the Defence Areas, compulsory billeting powers will be exercised?

Mr. M. MacDonald: Billeting power? are exercised by billeting officers appointed by mayors or by chairmen of district councils as the case may be, under powers delegated to them under paragraph (3) of Regulation 22 of the Defence Regulations, 1939.

SURGICAL MOBILE UNITS.

Sir Francis Fremantle: asked the Minister of Health how many surgical mobile units are now equipped and ready for action in the Emergency Medical Service; what is their distribution and personnel; and under whose orders they will move?

Mr. M. MacDonald: The number of surgical mobile units equipped and ready for action is 456, including 7 special units. Of this total 115 are in the London sectors and the remainder distributed over the principal towns in each region. A team consists of a surgeon, an anaesthetist, a sister and a male assistant who may be either an orderly or a medical student. The teams will move under the orders of the hospital officer or the group officer in the respective areas.

Sir. F. Fremantle: Is it proposed to increase that provision, or is it considered sufficient to deal with the situation at the present time?

Mr. MacDonald: I would like notice of that Question. Certainly, if there appears to be any need for increasing this provision, we shall increase it.

Sir F. Fremantle: Have they been used much yet?

Mr. MacDonald: Yes, Sir. At the time of the evacuation from Dunkirk a great many of these mobile surgical teams did exceedingly valuable work.

BILLETING ALLOWANCE.

Mr. De la Bère: asked the Prime Minister whether he will find time for a discussion of the Motion standing in the name of the hon. Member for Evesham relating to billeting allowance hardships?

[That this House notes the hardship which is being inflicted on many small and devoted households throughout the


country, by reason of the householders being compelled to billet civil servants, etc., for the sum of £1 1s., to include bed, breakfast and evening meal, and that the evening meal causes much difficulty and trouble in view of the fact that many of the working people who are compelled to billet these civil servants are engaged in work on shifts, or on agriculture in the fields, necessitating their coming home at all different hours, involving excessive work after a long day, with no opportunity of making the necessary preparations; notes that, in view of the rise in the cost of living, the payment of £1 1s. is now wholly inadequate, realises that in the coming winter additional fire and light will add to the already excessive costs, and feels that it is inequitable to burden the poorer sections of the community and compel them to be out of pocket for the benefit of the more wealthy sections of the community who are billeted on them, and urges on the Government the vital necessity of making the necessary financial adjustments, or, alternatively, considering the return of these civil servants to their original addresses at an early date.]

The Lord Privy Seal (Mr. Attlee): I regret that I can hold out no hope of a special opportunity being given for the discussion of the Motion standing in the name of my hon. Friend.

Mr. De la Bère: Is the right hon. Gentleman not aware that these hardships of billeting allowances prevail throughout the country? In the case of my division it would not be in the public interest to give the special circumstances, so perhaps the right hon. Gentleman would have a word with me afterwards.

INTERNMENT CAMPS.

Sir Richard Acland: asked the Prime Minister by whom the inquiry to find out who were the individuals responsible for conditions in internment camps is being conducted; whether it is being diligently prosecuted; when it may be completed; and whether the results will be made public?

Mr. Attlee: As I have already explained to the House, certain investigations are being made. I am not prepared to make any further statement at present.

Sir R. Acland: Am I right in thinking that it is now contemplated that there should be a brief discussion on the whole

of this subject before the Recess, and, if so, will the right hon. Gentleman or some other Minister be prepared then to consider suggestions? This matter is now in the hearts of the people so much that there should be some kind of public inquiry in the nature of a Select Committee or some inquiry of that sort.

Mr. Attlee: There will be an opportunity for the hon. Member to raise it on the Adjournment.

INTERNEES.

Mr. Sloan: asked the Secretary of State for the Home Department whether he is aware that none of the people interned in Barlinnie Prison, Glasgow, has had an opportunity of having his case reviewed before the Advisory Committee, and what steps he proposes to take to have the law administered in this respect?

The Secretary of State for the Home Department (Sir John Anderson): I am informed that all these men are Italians of dual nationality. I am arranging for a special committee to review the cases of Italians who have been interned as enemy aliens, and who come within the categories of eligibility for release, and I propose to ask this committee also to act for the purposes of Regulation 18B of the Defence Regulations, and to deal with the cases of Italians of dual nationality.

Mr. Sloan: Is it not time that this matter was cleared up, because some of these people, who were born in Scotland, have been in Barlinnie for six or seven weeks?

Sir J. Anderson: Yes, Sir; I am anxious that this matter should be cleared up.

Mr. Cecil Wilson: asked the Home Secretary what was the strength of the administrative division dealing with aliens and refugees, respectively, prior to the outbreak of war, prior to 1st May, and at the last available date; how many are men and how many women; how many are attached to transitional and how many to other camps; how many of those appointed since 1st May are believed to be under 40 years of age; and what are the requisite qualifications for this delicate and urgent work?

Sir J. Anderson: As the reply contains a number of figures, I will, with permission, circulate it in the OFFICIAL REPORT.
Following is the reply:
The administrative and clerical staff of the Division dealing with aliens and refugees on 1st September, 1939, 1st April, 1940, and 12th August, 1940, was as follows:



Total.


1st September, 1939, 121 men, 75 women
196


1st April, 1940, 114 men, 79 women
193


12th August, 1940, 161 men, 92 women
253


It is not possible to distinguish between the staff employed on refugee work and on general aliens work. Of the staff appointed since 1st May, 22 are under 40 years of age, and of this number 16 are under the age of 20. The qualifications for this work are much the same as those required for other administrative and clerical work in the Home Office. So far as possible, use has been made of the services of those with suitable previous experience. None of the staff mentioned are attached to camps. All the staff now at the camps have been appointed by the War Office.

Mr. James Hall: asked the Home Secretary whether he has now completed his inquiries concerning the case of Mr. Jakob Felsenstein, No. 75948; whether this man has been deported; and, if so, to what destination, and for what reason?

Sir J. Anderson: Jakob Felsenstein went to Australia on 10th July on the understanding that his wife, Esther Felsenstein, would be given an opportunity to follow him if she were willing to do so and if arrangements could be made for this purpose. She has expressed her willingness to go, but, as stated in the reply given on 13th August to a Question by the hon. Member for the Combined English Universities (Mr. Harvey), it has become necessary to defer for the time being the completion of the arrangements for sending the wives of internees to Australia.

Mr. Hall: Is the right hon. Gentleman aware that after this man's wife was informed that he had been sent to Australia, she was then informed that he had been sent to Canada? She does not know where he is, whether he is in Canada or Australia; and she cannot take any steps to travel to meet him.

Sir J. Anderson: I cannot understand that statement, because, as I have said, this man has been sent to Australia, and

his wife has expressed willingness to meet him there.

Mr. Hall: At a later date she was informed that he had been sent to Canada, and not to Australia.

Sir J. Anderson: Perhaps the hon. Gentleman will let me know by whom she was so informed.

Mr. Woods: asked the Home Secretary whether he will apply the conditions of release, as set out in Command Paper 6217, to Italian internees, as well as to German and Austrian civilians?

Sir J. Anderson: Yes, Sir, so far as they are applicable.

Mr. Woods: asked the Home Secretary whether he will include in the categories of persons eligible for release from internment students below 20 years of age, who have not completed their course of studies and who by completion of their studies will be equipped and able to contribute to the national cause?

Sir J. Anderson: This matter is being considered by the Advisory Committee.

Mr. Woods: As there has been considerable delay and many cases have been held up, will the Home Secretary promise that the matter shall be expedited?

Sir J. Anderson: I hope to be able to make a statement in the next few days.

Mr. Ammon: asked the Home Secretary whether he is aware that Herman Podolsky, a category C alien, resident in this country for several years, has been interned, and had to leave his business in Camberwell, and that his two aged parents, refugees from Nazi persecution, who know no English, are placed in grave difficulties, and cannot get into touch with the internee; and whether this man, whose character can be vouched for by several Members of Parliament, may now be released, that he may be an asset instead of a liability to the nation?

Sir J. Anderson: I have made careful inquiries and regret that I can find no ground for treating the case of this alien as coming within any of the existing categories in the White Paper.

Mr. Ammon: Has the right hon. Gentleman been able to trace this man?

Sir J. Anderson: Yes, Sir.

Mr. G. Strauss: Does the Home Secretary not think that this is an excellent ground for enlarging the categories?

Sir J. Anderson: I have just said that I hope to be able to make a statement on that matter in the next few days.

Mr. R. Gibson: asked the Home Secretary whether he will extend No. 15 of the categories of persons eligible for release from internment, contained in Command Paper 6217, so as to include spinsters who have, or have had, a British born or naturalised brother serving in the British Navy, Army, or AirForce?

Sir J. Anderson: The proposed extension would not serve any useful purpose, since no woman placed in category C has been interned except on security grounds personal to herself, and in such a case the mere fact of having a brother serving in His Majesty's Forces would not be sufficient to justify her release

Mr. Rhys Davies: asked the Home Secretary whether Italian internees are to be treated on similar lines to German and Austrian internees?

Sir J. Anderson: Yes, Sir. The conditions in internment camps are the same; and, as I stated on 23rd July, the arrangements for exemptions and releases will extend—so far as applicable—to Italians.

Mr. Davies: Will my right hon. Friend bear in mind that there are Jewish refugees who have fled from Fascist persecution in Italy?

Sir J. Anderson: Yes, Sir, I have that in mind.

Mr. Granville: asked the Home Secretary the number of enemy aliens who have been interned from the staff of the Dorchester Hotel, London; and the numbers of Swiss, Italian and German nationality still employed by this establishment?

Sir J. Anderson: I am informed that, among a staff of 487 persons, there are 26 Swiss, 10 Italians and one German. The German is a refugee, aged 16, whose father is serving in the Pioneer Corps; and of the 10 Italians one is a woman and the other nine have lived in this

country for 25 years or more. Two persons of enemy nationality who were formerly members of the staff have been interned.

Mr. Granville: Is the right hon. Gentleman aware that Ministers of the Crown are in residence in this hotel? Can he say whether departmental documents and dispatch boxes are sent there; and does he think that that is desirable, in the interests of national security?

Sir J. Anderson: I do not think that that arises out of the Question.

Mr. Wilson: asked the Home Secretary why Roland Hulka, a Czech refugee, has been imprisoned in Strange-ways gaol, Manchester, since 8th June; and why, as a friendly alien, he has not been placed in an internment camp?

Sir J. Anderson: This man is detained in the interests of national security. Persons of non-enemy nationality have not as a rule been placed in internment camps with persons of enemy nationality, but I hope to arrange in due course for their transfer to a special camp.

Mr. Wilson: Will the right hon. Gentleman explain how it is that this man, having on his police registration the words "Friendly alien of Czech nationality," has been interned?

Sir J. Anderson: As I explained, he was interned on security grounds peculiar to himself.

Mr. Noel-Baker: Has any specific charge been made against the man himself?

Sir J. Anderson: Not necessarily a specific charge in the sense of a criminal charge, but there are specific grounds for the internment of this individual.

Mr. Shinwell: What is meant by "on security grounds"? Does it mean that internment is intended to protect the person concerned?

Sir J. Anderson: The hon. Gentleman will understand, I think, what is meant by "security grounds" if he will refer to the Regulations under which action was taken.

Dr. Morgan: asked the Home Secretary the present whereabouts of Frank Bascombe, who, in May this year, was arrested and detained in Brixton Prison;


whether he is still in prison or sent overseas or transferred to a camp; and what are the grounds of his detention?

Sir J. Anderson: This man is a native of Barbados, who came to this country for the first time after the outbreak of war, having lived in Germany for 14 years. He has been detained on security grounds and is at present in Stafford Prison.

ANTI-NAZI REFUGEES.

Mr. Wilson: asked the Home Secretary how many class "C" refugees have been sent overseas, and how many of these have been so sent without the consent of their parents or guardians and unaccompanied by any adult relative?

Sir J. Anderson: I would refer my hon. Friend to the reply given yesterday to a similar Question by the hon. Member for the Nelson and Colne Division (Mr. Silverman).

Mr. Silverman: Does the right hon. Gentleman not think that it would be worth while, for the satisfaction of the parents, who do not know where these boys are, to find out how many of such boys have been deported without the knowledge or consent of their parents?

Sir J. Anderson: Any parent can find out where his child is by reference to the inquiry bureau which has been set up at Scotland House.

Mr. Hammersley: Is my right hon. Friend aware that this inquiry bureau is not working satisfactorily, that individuals have made some inquiry as to the whereabouts of their children and that they have had no reply for several days, that they have put the same inquiry down again and that they are still waiting?

Sir J. Anderson: If my hon. Friend will put down a Question, I will endeavour to deal with the matter.

Mr. Silverman: Is the right hon. Gentleman aware that for the past 14 days I have had a Question down to himself about this matter and that so far he has been unable to answer it?

Sir J. Anderson: Yes, Sir; the reason is that statistics are not immediately available to enable an answer to be given, and it would not be desirable to

make a special investigation of all the files for the purpose of collecting the information.

Mr. Silverman: I was asking about an individual case.

DIRECTION SIGNS (REMOVAL).

Mr. Mander: asked the Home Secretary whether he will make it clear that the Removal of Direction Signs Order, dealing with the obliteration of place names, applies to farm vehicles?

Sir J. Anderson: The Removal of Direction Signs Order applies to all signs visible from a highway which indicate the situation of any place. As place names on farm vehicles might assist an invader to find his way, my right hon. Friend the Minister of Agriculture and Fisheries has recently asked farmers to obliterate all such names from these vehicles.

Mr. Mander: Is the Home Secretary aware that a great many farmers do not know of this matter; and, in view of its very great importance, will he see that it is brought to their attention?

Sir J. Anderson: I will certainly consult with my right hon. Friend.

Sir Irving Albery: Is this not going rather far? Any invader in this country will certainly be supplied with excellent maps.

EXIT PERMITS.

Mr. Gallacher: asked the Home Secretary whether he is aware of the hardship caused to some 300 building workers, citizens of Eire, at present engaged on Government construction work in Liverpool, who are refused permission to pay week-end visits to their families in Eire; and whether he will secure the raising of the ban on such short visits home by these men?

Sir J. Anderson: As I have explained on previous occasions, the grant of such facilities would not be consistent with the objects which the existing control of passenger traffic between this country and Eire is designed to serve.

Mr. Gallacher: Will the Home Secretary arrange for some method of identity cards to enable these men to visit their families in Eire?

Sir J. Anderson: It could be arranged, but it would defeat the object of the


existing system, which is to reduce the volume of passenger traffic between Ireland and this country to a minimum.

Mr. Magnay: asked the Home Secretary whether he is aware that Dr. McMullan, of Wrekenton, Gateshead, was refused by the Passport Office, Dale Street, Liverpool, a passport to Bally-mena, County Antrim, to see his dying mother, although he sent in triplicate the proper form of application required, accompanied by the local doctor's certificate, but that on 10th August he received a letter from the passport office stating that the police in Ballymena must also certify the condition of his mother; was this action taken on his instructions; and will he see that no police certificate is asked for if a doctor's certificate has been obtained?

Sir J. Anderson: Exit permits are granted to enable persons to travel to Northern Ireland to visit sick relatives, subject to verification of the facts in each case. I am informed that Dr. McMullan's application for an exit permit was not refused, but that as an immediate journey was not proposed he was asked to arrange for confirmatory evidence of his mother's illness to be sent to the Passport Office in Liverpool by the police in Ballymena. Experience has shown that it is necessary to obtain such confirmatory evidence in many cases, but I have given instructions that in future an exit permit is to be granted without further inquiry in any case where a doctor's certificate is produced in support of the application.

Mr. Magnay: Has the right hon. Gentleman severely admonished the stupidity of this passport office in not accepting a doctor's certificate concerning a doctor's mother? It is no use now. The old lady is dead. The very time he came to see me was the time of her funeral. I hope that the right hon. Gentleman will admonish these people.

Sir J. Anderson: As I explained, I have issued instructions that permits are to be granted in future in every case where a medical certificate is supplied with the application.

SHELTERS.

Sir Robert Young: asked the Home Secretary whether he is aware of the inadequate provision of communal shelters in the area of which he has been privately informed; what number of shelters

have been provided; what number of people can be accommodated in them; and, seeing the amount of war work being done by night and day in the locality, he will urge the county council concerned to expedite construction of the shelters required?

Sir J. Anderson: This district was not among those specified for the purposes of Part III of the Civil Defence Act, and until recently it was not contemplated that domestic shelter should be provided there. I understand that plans have now been drawn up for providing communal domestic shelters in the more crowded part of the district and that work will be put in hand as soon as materials are available. Proposals for public shelters on a sufficient scale have already been approved and work is in progress.

EMERGENCY REPORTS (CHIEF CONSTABLES).

Mr. Stokes: asked the Home Secretary to whom the chief constables report, in case of emergency, in the event of their being unable to communicate with the Home Office?

Sir J. Anderson: In this contingency reports dealing with the emergency situation would as a rule be made to the Regional Commissioner.

AIR-RAID WARNINGS.

Mr. Woodburn: asked the Home Secretary whether he is aware that people in many areas get no opportunity of taking shelter during actual air raids owing to the failure to sound the sirens while on other occasions they receive the warning of a possible raider; whether this apparent confusion of warnings could be avoided, by the sounding of the warning on all occasions, leaving it to the decision of individuals and organisations whether or when they should act upon a warning and whether he will tell the public what is the policy regarding warnings?

Sir J. Anderson: Discussions on this subject have been proceeding for some time, and I hope to be in a position in the course of the next few days to issue a statement supplementing what I said on 2nd July in answer to a Question by the hon. Member for Duddeston (Mr. Simmonds). That being so, I think it better that I should not attempt to deal with this somewhat complicated issue within the limits of an answer to a Question.

ENEMY ALIENS.

Mr. G. Strauss: asked the Home Secretary whether the regional advisory committees which were set up to review the categories in which enemy aliens had been placed are still functioning; and, if so, how many aliens with a B certificate have been given a C certificate and vice versa since 1st July?

Sir J. Anderson: These committees are still in being, and I am glad to have this opportunity of paying a tribute to the value of the work which they are doing. As the answer to the second part of the Question involves a number of figures, I will, with permission, circulate the information in the OFFICIAL REPORT.

Following is the information:


Statement of aliens transferred from Category B to Category C and vice versa since 1st July, 1940, by the Regional Advisory Committees.


—
Males.
Females.
Totals.


Category B to Category C.
17
72
89


Category C to Category B.
13
29
42


Totals
30
101
131

BOOKS.

Sir I. Albery: asked the Home Secretary whether he is satisfied that it is necessary to prohibit the sale and use of books descriptive of the English countryside?

Sir J. Anderson: There is no prohibition on the sale and use of such books as my hon. Friend has in mind. If he is referring to the Control of Maps Order, the relevant provision in this order relates only to the possession by aliens of guide books which give detailed information of road routes as opposed to general descriptive matter.

COAL SUPPLIES (OLD AGE PENSIONERS).

Mr. Tinker: asked the Minister of Health whether he is aware that the poorer section of the community, such as the old age pensioners, have not the means to provide extra stocks of coal to meet the call of winter months; and whether he will give consideration to the fact that it is essential that we should

take advantage of our present coal supplies and take the necessary steps to give an extra hundredweight a week to all in receipt of old age pensions?

Mr. M. MacDonald: The hon. Member will be aware that the regulations for supplementary pensions contain special provision for additional payments to meet needs due to winter conditions, and I think that these in effect meet the point of his question.

Mr. Tinker: As we have surplus stocks of coal and the question is where it shall be stocked, may I suggest that very good service could be performed by stocking it in the homes where it is needed, and especially in those of old age pensioners?

OLD AGE PENSIONS.

Sir Jonah Walker-Smith: asked the Minister of Health whether he is aware that the Assistance Board act unfairly in cases of claims for supplementary pensions, by giving nil determinations in cases where the aged are living with sons-in-law, or with distant relatives, and also in cases where the old folks have invested their money in war savings in the belief that such investments would be ignored to the amount of £375; and, as the operation of a family means test is causing distress to many of the aged because they are being thrown upon their relatives for their sustenance, and thus deprived of their independence, will he institute an inquiry into the working of the Act, with a view to the withdrawal of the Measure?

Mr. M. MacDonald: The Act imposes on the Board the duty of taking into account (with certain exceptions) the resources of all members of the household of which the applicant for a supplementary pension is a member. The question whether a particular applicant is a member of a household is not one which under the Act can be decided on grounds of relationship but only after taking into consideration all the facts of the case. As regards war savings, as my hon. Friend is aware, this matter is under active consideration. With regard to the last part of the Question, I would point out that while no person is any worse off owing to the passing of the Act, over 600,000 people who had previously received nothing from the local authority, or from


the State beyond their old age or widow's pension, are at present receiving supplementary pensions under it, and I do not therefore think there would be general agreement with a proposal that it should be repealed.

Sir J. Walker-Smith: How does the figure of 600,000 who are now receiving supplementary pensions compare with the number of those who previously received supplementary aid from public assistance?

Mr. MacDonald: Before the coming into force of the Act, some 270,000 old age pensioners were receiving additional payments from local authorities. Since the coming into force of the Act that figure has increased to some 950,000 receiving supplementary pensions. Perhaps I may add that, whereas the money involved at the time when this Act came into operation amounted to some £6,000,000 a year, the figure has now risen to something like £24,000,000.

Sir J. Walker-Smith: While that is the measure of the value of this Act to old age pensioners, there is obviously no reason whatever for the withdrawal of the Act, I entirely agree; but would the Minister tell me whether I am right in saying that any cases of hardship that may arise in the administration of the Act will receive the consideration of the Department?

Mr. MacDonald: Certainly, Sir.

Mr. Shinwell: Because of varying decisions by the Board's officers, are there not thousands of people who have been receiving nil determinations, and does the Minister not know that, in certain areas, the whole thing has become a perfect muddle; and will he not take steps to discuss the whole scheme?

Mr. MacDonald: I cannot accept that description, but clearly when such a scheme, involving, as I say, already 1,000,000 people comes into operation, I dare say there are individual cases where the assessment has not been quite what it should have been. All those matters will be looked into on appeal, or on action being taken by the hon. Members concerned, with a view to securing that the administration is exactly as this House desires it to be.

Mr. Silverman: Is the right hon. Gentleman not aware that the public

assistance investigation officers all over the country are treating the fact that an old age pensioner happens to live in the same house with a relative, as itself evidence that he belongs to the same household, and that they refuse to make a determination on that account? Will he not look into that evil, the existence of which is proved by the postbag of every hon. Member of this House?

Mr. Leslie: asked the Minister of Health whether he is aware of the disappointment felt by old age pensioners in the county of Durham at the administration of the new Pensions Act, whereby many have been refused any allowance and others have received very meagre amounts; and whether he can state the number of appeals lodged by these old people?

Mr. MacDonald: As regards the first part of the Question, I am not aware of any general disappointment or dissatisfaction. This would seem to be borne out by the fact that up to 9th August, the latest date for which figures are available, 247 appeals have been lodged in the Board's administrative district of Durham out of 25,646 cases in which decisions have been given.

Mr. Leslie: Is the Minister not aware that pensioners who have been turned down were residing with sons or daughters, some of those sons having large families of six or more children? Why should their earnings be used against the pensioner?

Mr. MacDonald: I can assure the hon. Member that if there are cases where the intention of Parliament is being defeated in the administration of the Act, the Government are extremely anxious that these cases should be looked into. I cannot say more than that.

Mr. James Griffiths: Is the Minister not aware that many of the old people getting a shilling or two do not appeal because they do not think they have the right to do so? Will he consider this suggestion, because it is very important, that they should issue with the determination an appeal form? No appeal form is issued now, and the people do not know that they have the right to appeal.

Mr. MacDonald: I will certainly look into that matter. We are anxious that the old people concerned should know that


they have this right to appeal. In fact, we have made the right as easy to carry out in practice as we could.

Mr. Lipson: asked the Minister of Health why supplementary old age pensions have been refused to Mr. and Mrs. Grinnell, of 2, Buckles Row, Grange Walk, Charlton Kings, Cheltenham, seeing that Mr. Grinnell is aged 87 and is nearly blind, that his wife is aged 68, and that their total combined income, including their old age pensions, is 23s. 1d. a week?

Mr. MacDonald: As the hon. Member will be aware, blind persons are expressly excluded from the scope of Part II of the Old Age and Widows Pensions Act, 1940, and are not, therefore, eligible for a supplementary pension. Such people are the responsibility of the appropriate local authority under the Blind Persons Acts, who have power to grant them allowances according to need. It may be that this case has been regarded as coming into this category. In any case I am having inquiry made into it and will write to the hon. Member as soon as possible.

Mr. Lipson: While thanking my right hon. Friend for his reply, may I ask him if he is aware that this case is typical of many in the Cheltenham area where these old age pensioners in need have had their applications for pensions refused? Will he give personal attention to those conditions?

Mr. MacDonald: My hon. Friend has sent me quite a number of cases, and I am giving attention to every one of them.

Mr. De la Bère: Perhaps my right hon. Friend will also take into account Evesham and the adjoining district.

RED HILL HOSPITAL, EDGWARE.

Sir Reginald Blair: asked the Minister of Health whether he will inquire into the long waiting list for ear, nose and throat cases at Red Hill Hospital, Edgware; and, in view of the urgency of some of these cases, whether he can arrange a distribution to Sector IV hospitals where there are vacant beds at the present time?

Mr. M. MacDonald: I am communicating with the Middlesex County Council, to whom this hospital belongs, and will let my hon. Friend know the result.

MEDICAL OFFICERS AND SANI- TARY INSPECTORS (SALARIES).

Mr. Key: asked the Minister of Health why, seeing that local authorities, as constituent members of the London District Council for local authorities' administrative, technical, and clerical services, are in honour bound to observe its awards and apply the bonus adopted by it on 1st July last, he has refused to approve the payment of that bonus to medical officers of health and sanitary inspectors?

Mr. M. MacDonald: I would refer the hon. Member to the reply which I gave on 1st August to the hon, Member for Rother Valley (Mr. Dunn), of which I am sending him a copy.

ARMED FORCES PENSIONS AND GRANTS.

Mr. James Hall: asked the Minister of Pensions whether he will reconsider the case of Mr. Patrick O'Neill, of 70, Kinberston Street, E.1, who was invalided out of the Army and whose case was being pursued by the Stepney Citizens' Advice Bureau and was abandoned by them after two months because of their inability to obtain a reply from the War Service Grants Advisory Committee?

The Minister of Pensions (Sir Walter Womersley): The War Service Grants Advisory Committee are empowered to recommend grants only for the benefit of persons actually serving in the Forces; and the case of Mr. O'Neill consequently had to be rejected. I regret the failure to notify the Citizens' Advice Bureau, which was due to temporary disorganisation consequent on the evacuation of staff from London.

Mr. Hall: Is the hon. Gentleman aware of the fact that the authorities at Toynbee Hall have tried for two months to get a reply from his Department, by both telephone and writing? Does he not regard that as a reflection upon the efficiency of his Department?

Sir W. Womersley: I agree that the authorities at Toynbee Hall failed to get a reply to their letter until my hon. Friend called my attention to it by this Question, and I looked into it myself. The regrettable reason was the evacuation of the staff from London. The records of letters had to be sorted out, and this letter was misplaced.

SWINTON COMMITTEE.

Mr. Mander: asked the Prime Minister whether, in view of the fact that persons drawn from the ranks of the Conservative and Labour parties are members of the Swinton Committee, he will consider the advisability of appointing a Liberal?

Mr. Stokes: asked the Prime Minister whether he will give the names of all Members of this House who have been appointed to, or invited to, work with the Swinton Committee?

Mr. Attlee: Perhaps my hon. Friends would be good enough to await the statement which my right hon. Friend the Prime Minister proposes to make at the end of Questions.

Mr. Mander: Is it proposed to deal with this particular Question which I have asked?
Later—

The Prime Minister (Mr. Churchill): I propose, with the permission of the House, to take advantage of the Questions of the hon. Members for East Wolverhampton (Mr. Mander) and Ipswich (Mr. Stokes) about the work and composition of the Swinton Committee, to make a few general observations on the subject. I submitted to the House some time ago the view that it was not in the public interest that Questions should be asked and answered about this Committee or other branches of Secret Service work, or about measures to deal with Fifth Column activities. It would be very wrong for a Government to plead the public interest as a reason for avoiding public and Parliamentary criticism and debate, and, personally, I would never do so. I am always anxious to give the House of Commons the utmost possible information, and to welcome debate. Therefore when I said it was not in the public interest that this matter should be

pursued, I hoped that this would have been accepted by all Members of the House. However, I regret to say that a number of Questions have been put on the Paper day after day, quite disregarding the request which the Government made. It would have been possible for the Government, under the powers now accorded, to prevent these Questions from appearing on the Paper, and to prevent all reference to the subject in the newspapers; but I thought it would be much better to leave the putting down of Questions to the good will and sense of responsibility of Members, and I am very sorry that in a few cases this attitude has not been forthcoming.
Now why is it that we have thought it right to plead the public interest against the discussion of the Swinton Committee and its work? Not assuredly because we have anything to conceal which would reflect upon the loyalty, impartiality, and good faith of the Government, or anything which would do the Government harm as a Government, if it were all explained in the utmost detail. The reason is simply one of principle, namely, that matters of this kind, and Committees of this kind, are not fitted for public discussion, least of all in time of war. The House has recognised this principle for many years, and has always refused to allow any discussion of Secret Service funds, or to receive any return of how the money is expended, and similarly I am sure the House would wish the rule to be respected in the case of a Committee which, as I said, deals with Fifth Column activities and other cognate matters. No other country, when it is at war, gives information of this kind, and once the principle was admitted that a stream of Questions could be put about them, and that the Government would be bound to answer these Questions factually, there would be very serious injury done to our safety.
The House has, almost unanimously, recorded its confidence in the Government. That does not mean that the House is confident we shall do everything right, or that errors of policy and administration should not be freely criticised, and scandals or negligence exposed; but it does mean, I think, that when such a Government pleads the public interest, it should be believed that it is acting fairly and honourably, and telling the truth, and not concerning itself with


shielding any Ministerial or personal, or party interest. I hope very much we may be believed by the House, and that confidence will not be withdrawn from us, even in a small matter like this, at a time when we are making head, and making head successfully, against dangers as great as any that have ever threatened our national freedom and survival.
I am sorry indeed to have to say so much about this Committee, because it makes people think there is something mysterious in the whole affair. Nothing could be more straightforward. About 10 weeks ago, after the dark, vile conspiracy which in a few days laid the trustful Dutch people at the mercy of Nazi aggression, a wave of alarm passed over this country, and especially in responsible circles, lest the same kind of undermining tactics and treacherous agents of the enemy were at work in our Island. [An HON, MEMBER: "Watch them."] Several branches of State Departments are, of course, always charged with the duty of frustrating such designs. But they were not working smoothly. There were overlaps and underlaps, and I felt in that hour of anxiety that this side of the business of National Defence wanted pulling together. I therefore asked Lord Swinton to undertake this task. [HON. MEMBERS: "Why?"] Because he was the best man to do it. [An HON. MEMBER: "He failed in another job."] One has to be very careful how one judges failure, especially when one's own record of success is not to one's credit. I am glad to tell the House that a very great improvement has been effected in dealing with this Fifth Column danger. I always thought it was exaggerated in this Island, and I am satisfied now that it has been reduced to its proper proportions, and is being gripped and looked after with very high efficiency. It is important that this should be so, because although we feel, and are, very much stronger than in May, the danger of invasion has by no means passed away, and we are repeatedly assured from German circles in foreign countries that the performance is about to begin. I should not have felt I was doing my duty by the National Defence, if I had not taken these special steps to cope with Fifth Column activities, and I can assure the House that the

powers that Parliament has given to the Executive will not be used consciously in any unfair, oppressive, or, if I may use the expression, un-British spirit. I trust therefore that the House will support me in declining, in the public interest, to answer any further Questions upon the subject.

Mr. Mander: While I agree with what the Prime Minister said and appreciate it, does he realise that the reason this Question was put down was this? As the names of the Committee gradually became known, there was a widespread lack of confidence in the personnel, and when I found that members of the Conservative and Labour parties were represented, I naturally asked why the Liberal party could not be represented.

Mr. Austin Hopkinson: There were two points made by the Prime Minister on which I should like further information, if I may have it. First, there was the statement that the Government have power to prevent Questions being put on the Order Paper. Surely not?

The Prime Minister: I am glad that Questions in the form which give away to the enemy matters which are essentially secret, and are against the public interest, are not accepted by the Clerks at the Table, and I think the views of Ministers would be considered in that respect.

Mr. Hopkinson: Then I understand it is only Questions which in their form are adjudged to be against the public interest?

The Prime Minister: indicated assent.

Mr. Hopkinson: This is an important point because you, Mr. Speaker, will recollect refusing sundry Questions which I myself put down. Refusal was on the ground that the Prime Minister said he would not answer a Question on that subject. It is within your recollection, Mr. Speaker, that I contested that Ruling and stood out against it. I was under the impression that it was an important part of our privileges that we should be able to put down Questions on the Paper which conveyed no information in any way detrimental to the public interest, though the Minister concerned would then be perfectly at liberty to refuse to answer. What I maintain is, that the


Chair cannot refuse to put these Questions on the Paper, and I think I have established that right on this occasion. Another point was this: I think we are all agreed that the Prime Minister is fit to judge whether this particular Committee should be set up.

Mr. Speaker: The hon. Member will remember that the statement made by the Prime Minister was in answer to a Question. There cannot be any Debate.

Mr. Hopkinson: I am trying to elucidate further information, with your permission, Mr. Speaker. We cannot understand why so much mystery was made about it. That is really what has given rise to all the trouble. When great mystery was made about it and names were refused, trade union opinion became very suspicious, whether justifiably or not is not the point. When the name of Lord Swinton was announced that suspicion was increased, owing to his activities on behalf of big business in politics.

Mr. Speaker: The hon. Member is making a speech.

Mr. Hopkinson: With your permission, Mr. Speaker, I am endeavouring to elucidate from the Prime Minister the reason why—

Mr. Speaker: If the hon. Member would ask a definite Question, the Prime Minister would no doubt answer it. Otherwise I cannot allow debate.

Mr. Hopkinson: Why did the Prime Minister make such a mystery about it and refuse to give information which was perfectly harmless?

The Prime Minister: If my hon. Friend had paid half the attention to the full and very respectful statement which I have made to the House that he was accustomed to giving to obstructing my efforts to get this country properly defended before the war, I would not have had to answer this Question at all.

Mr. Hopkinson: I ask for your protection, Mr. Speaker, against this gross and lying innuendo?

Hon. Members: Withdraw.

Mr. Hopkinson: May I ask the right hon. Gentleman to withdraw that statement? He is perfectly well aware that no man in this country has done more than I have.

The Prime Minister: Far from withdrawing what I said, I will take the liberty of sending the hon. Gentleman a copy of one of his interventions in Debate, which I looked up only last night, in which he did his utmost to discredit me when I was doing my utmost for the country.

Mr. Hopkinson: I recently looked up the same thing myself and discovered that that intervention was justified up to the hilt.

Captain Bellenger: On a point of Order. We have the greatest faith in the Prime Minister, but is it in order for the right hon. Gentleman, who knows the customs of this House, to make an attack on an hon. Member who has no opportunity of replying?

Mr. Speaker: The hon. Gentleman took advantage of an occasion to which he was not entitled, and that is how the trouble arose.

Mr. Stokes: Arising out of the Prime Minister's statement, may I ask whether he does not yet realise that the real concern in the country is about the composition of the committee? Secondly, may I ask what conceivable public interest is hurt by our being told what Sir Joseph Ball and Mr. Crocker are being paid? That information was refused last week, and it is quite unreasonable that we should not be told.

The Prime Minister: There would be no conceivable injury to the public interest in these two facts being known. I am entirely indifferent on that subject. But I think that if we are to have the Government cross-questioned about this committee and Secret Service work, and one point after another is brought out, and Members say, "Why did you not tell us that before?" that is a process which would be vitiating the measures of secrecy taken by the Government in this matter, and a right which is claimed by every other Government.

Mr. Maxton: The Prime Minister has stated that this all arose out of our doubts and fears after the Dutch happenings. Does he recognise that after the French happenings, other doubts and fears began to arise? I accept, in general, what the right hon. Gentleman has said as to it being right and proper that Questions


should not be put carelessly about things of this description, but if we accept what he has asked us to do, and put upon ourselves a self-denying ordinance not to ask Questions about this type of thing, can he give us an answer to the old classical question, "Who watches the watchers?"

The Prime Minister: The House watches the Prime Minister and the other Members of the Government and says whether it has or has not confidence in their general integrity and purpose, and then those Ministers and the Prime Minister watch the others to make sure that they keep up to the mark.

Mr. Stokes: Will the Prime Minister tell us what Sir Joseph Ball and Mr. Crocker are paid?

Mr. Speaker: We cannot pursue this matter any further.

The Prime Minister: The main purport of my answer was that I would answer no further Questions, at any time, on this particular subject. Whether it is convenient or easy for me to answer them or not, I would not think of answering any of them. I have said that it is not in the public interest that private matters of this kind should be ferreted out and discussed in public. I should have thought that, having appealed to the House in this way, the Government might receive that consideration which they are entitled to claim.

Mr. A. Bevan: On a point of Order. As notice was given a little while ago that this matter was to be raised on the Motion for the Adjournment, would it not assist—

Mr. Speaker: This is not the Motion for the Adjournment.

Mr. Bevan: Yes, Sir, but would it not be desirable that the atmosphere should be cleared up at this moment so as to avoid, if possible, any further discussion? Is it not the fact that the right hon. Gentleman has inadvertently missed the whole point of the criticism? No Questions have been put on the Order Paper the answers to which would have injured the public interest. [HON. MEMBERS: "Oh!"] The Prime Minister cannot point to any Question of that kind. But there is widespread dissatisfaction in the country about the composition of this committee.

Mr. Stokes: I put a Question down about the payment of the members of this committee. The Lord Privy Seal said that Lord Swinton and Mr. Wall were paid nothing, but that he was not prepared to tell us what Sir Joseph Ball and Mr. Crocker were paid. Now that we know that Lord Swinton and Mr. Wall are not paid anything, surely we are entitled to know what Sir Joseph Ball and Mr. Crocker are paid.

The Prime Minister: That is covered by the very careful and lengthy answer which I have given. At any rate, that is the position which the Government take up.

Mr. Thurtle: May I put this one point? Has it escaped the notice of the Prime Minister that many of the Members who are pressing this Question are rather lukewarm about the prosecution of the war?

Mr. Bevan: On a point of Order. Should not the hon. Member who has made that statement make some distinction and indicate to whom he refers, and is it not time that certain hon. Members should cease to act as pimps of the Government?

Mr. Thurtle: May I ask you, Mr. Speaker, whether it is in Order for an hon. Member to apply a foul and offensive term to another Member?

Mr. Bevan: When the hon. Member indicates the persons to whom he refers and defends his indication, I will withdraw my remark.

Sir William Davison: Is it desirable that, at this critical time, democracy should be made a laughing-stock by such a frivolous attack upon the Prime Minister, whom the whole country desires to carry forward this nation to victory?

Mr. Speaker: I think it is time that this unedifying incident ceased.

Oral Answers to Questions — AGRICULTURE.

COUNTY WAR AGRICULTURAL EXECUTIVE COMMITTEES.

Mr. De la Bère: asked the Minister of Agriculture whether he will give an assurance that adequate provision is being made by the Government to safeguard the farmers throughout the country against the indiscriminate use of power by the county war agricultural committees; and


whether in this connection he will institute some central body of appeal?

The Minister of Agriculture (Mr. R. S. Hudson): County war agricultural executive committees consist of persons with practical agricultural experience and knowledge of local conditions. I have no evidence to indicate that they are making an indiscriminate use of their powers which, I would remind my hon. Friend, have as their object an increase in home food production commensurate with our national need.

Mr. De la Bère: Is my right hon. Friend aware that power often corrupts and that absolute power corrupts absolutely? I make no suggestion that these bodies are in any way corrupt, but is it not very desirable that there should be some right of appeal to a central body in cases where any hardship is involved? My right hon. Friend will appreciate this point, as he is a man of the world.

RABBITS.

Mr. R. Gibson: asked the Minister of Agriculture what special steps he proposes to take to ensure that, from the beginning of September, rabbits will be made available in large numbers for food, and at the same time a serious cause of depredations of foodstuffs growing, and still to be grown, will be eliminated?

Mr. Hudson: Rabbit destruction is an essential part of the Government's general food production policy, and county war agricultural executive committees will shortly intensify their campaign against this pest, in the exercise of their powers under the Rabbits Order, 1940.

Mr. Gibson: By what special steps will that intensification be made?

Mr. Hudson: By intensifying the campaign.

Mr. T. Smith: Will poachers be encouraged?

SHEEP.

Mr. Emery: asked the Minister of Agriculture whether, in view of the fact that Cheviot and Black-faced breeds of sheep are the bases of the national sheep-stock and require no imported foodstuffs, he will initiate consideration of a policy of supplementing war-time food and wool supplies by placing an increased number of these breeds on drained idle pastures

and idle residential grasslands of Sussex and Hampshire; and will he begin to prepare, in those counties, heather areas for hill sheep?

Mr. Hudson: I will consider my hon. Friend's suggestion.

FERTILISERS.

Mr. Emery: asked the Minister of Agriculture whether his expert staff has already decided upon a plan for applying the Howard-Indore process of converting town rubbish into compost and humus so as to increase war-time food, to be worked alongside the Tottenham kitchen refuse method for pig feeding; and whether he has yet issued to municipal authorities a pamphlet explaining the Howard-Indore process?

Mr. Hudson: I would refer my hon. Friend to an answer I gave to my hon. Friend the Member for Tonbridge (Sir A. Baillie) on 20th June last.

SEEDS.

Sir Richard Wells: asked the Minister of Agriculture what steps are being taken to harvest seed potatoes and seeds for vegetable crops for next year's sowing?

Mr. Hudson: I would refer my hon. Friend to the answer I gave to the hon. Member for South Bristol (Mr. Walkden) on 8th August, 1940.

INDIA (VOLUNTEER ORGANISATIONS).

Mr. Sorensen: asked the Secretary of State for India what is the nature and extent of the ban on voluntary organisations in India; and how far this applies to Indian Congress volunteer organisations?

The Secretary of State for India and Burma (Mr. Amery): There is no ban in India on volunteer organisations as such, but in view of the feelings of insecurity which have been occasioned by the recent increase in what Mr. Gandhi has described as "private armies," run on party or communal lines, orders have been recently issued, under the Defence of India Rules, prohibiting drilling of a military nature, with or without arms, and the wearing of uniforms resembling official uniforms, by private individuals.

Mr. Sorensen: Is the right hon. Gentleman aware that Mr. Gandhi himself has condemned these so-called amateur armies?

BURMA (Dr. U. BA MAW, ARREST).

Mr. Sorensen: asked the Secretary of State for Burma why Dr. U. Ba Maw, ex-Premier of Burma, has been arrested; what charge was made against him; whether he has been granted bail; and when he will be brought to trial?

Mr. Amery: The arrest of Dr. Ba Maw is a matter responsibility for which lies, under the provisions of the Government of Burma Act, with the Burman Ministers, on whose initiative the arrest was made.

Mr. Sorensen: Since the initiative took place in Burma, has there been any confirmation or agreement between Burma and our own Government?

Mr. Amery: That question does not arise. I understand that Dr. Ba Maw was prosecuted for a speech he made some little time ago. He has since been released on bail, and his case comes up on the 19th of this month.

Sir H. Williams: In a case where we grant a country Home Rule, should they be allowed to have it?

MOTOR SPEED LIMIT.

Mr. Lipson: asked the Home Secretary what communications he has made to local police authorities since the war concerning the enforcement of the speed limit in built-up areas?

Sir J. Anderson: A circular was issued to chief constables in January last drawing their attention to the new Order imposing a speed limit of 20 miles an hour in built-up areas during the hours of darkness. No other circular on the subject of the speed limit has been issued to the police since the outbreak of war.

Mr. Lipson: May we assume from the reply of my right hon. Friend that it is his desire that the speed limit in built-up areas should be enforced?

Sir J. Anderson: Yes, Sir, certainly.

BYSSINOSIS.

Dr. Morgan: asked the Home Secretary the position with regard to byssinosis, or card-room workers' bronchitis; whether a scheme for workmen's compensation for those disabled by this disease has been agreed, or negotiations completed; whether the necessary legislation is being prepared; whether this legislation, or Parliamentary approval to the scheme, can be expedited; and when it is likely to be laid before the House?

Sir J. Anderson: Proposals based on the Departmental Committee's recommendations have been substantially accepted by the employers' and workers' associations concerned, and a Bill to enable effect to be given to them is being prepared. I hope that it may be possible to introduce the Bill soon after Parliament reassembles.

CHANNEL ISLANDS.

Mr. Ammon: asked the Home Secretary whether action is being taken to obtain release, by exchange or otherwise, of women and children and the aged and infirm left behind in the Channel Islands, having regard to the hardship bound to arise through shortage of food?

Sir J. Anderson: As I told my hon. Friend last week, I will bear his suggestion in mind; but, as he will realise, there are many difficulties and I can make no statement on the subject at present.

Mr. Ammon: asked the Home Secretary whether the people who lost their all owing to the evacuation of the Channel Islands will receive compensation?

Sir J. Anderson: I regret that I am not in a position to give any undertaking in this matter at the present time.

SOMALILAND OPERATIONS.

The Prime Minister: I have some unsatisfactory news for the House about Somaliland. The small British holding force which was occupying the Tug Argen position to the North-East of Hargeisa has been driven back by greatly superior Italian forces, amounting to about two divisions, including armoured vehicles and considerable artillery. As


operations are still in progress, I cannot say any more, but I shall be dealing generally with the Eastern situation next week.

Captain Bellenger: May I ask the right hon. Gentleman whether his statement on Tuesday next will be limited to the Eastern situation?

The Prime Minister: No, Sir.

BUSINESS OF THE HOUSE (SUMMER RECESS).

Mr. Lees-Smith: May I ask the Prime Minister whether he will state the business of the House for next week and also make a statement about the Adjournment for the Recess?

The Prime Minister: On Tuesday the Adjournment of the House will be moved, and I shall make a statement on the war situation. A Debate will take place in Public Session.
On Wednesday we desire to pass the Allied Forces Bill through all its stages. The Bill is expected to be received from another place to-day, and copies will be circulated to Members tomorrow. The consideration of any Lords Amendments to the Agriculture (Miscellaneous War Provisions) Bill, a Motion to approve of the Home Grown Oats (Standard Price) Order and the consideration of any outstanding business will also be taken.
On Thursday the House will meet at 11 a.m. Questions will be taken until noon, and the Motion for the Adjournment of the House until Thursday, 5th September, will be proposed.
On Thursday, 5th September, the House will meet at the usual hour, 2.45 p.m., and, if necessary, a statement can be made upon the war situation.

Mr. Lambert: Can the Prime Minister give any indication as to the length of this Parliament?

The Prime Minister: indicated dissent.

Ordered,
That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]

Ordered,
That the Third Reading of the Finance (No. 2) Bill may be taken immediately after the consideration of the Bill, as amended, notwithstanding the practice of the House as to the interval between the various stages of such a Bill."—[The Prime Minister.]

Resolved,
That this House, at its rising this day, do adjourn till Tuesday next."—[The Prime Minister.]

MESSAGE FROM THE LORDS.

That they have agreed to,—

Agriculture (Miscellaneous War Provisions) (No. 2) Bill with Amendments.

That they have passed a Bill, intituled, "An Act to make provision with respect to the discipline and internal administration of certain Allied and associated Forces, and for the application in relation to those Forces of the Visiting Forces (British Commonwealth) Act, 1933, the Naval Discipline Act, the Army Act and the Air Force Act." [Allied Forces Bill [Lords].

AGRICULTURE (MISCELLANEOUS WAR PROVISIONS) (No. 2) BILL.

Lords Amendments to be considered upon Tuesday next, and to be printed. [Bill 83.]

ALLIED FORCES BILL [Lords].

Read the First time; to be read a Second time upon Tuesday next, and to be printed. [Bill 82.]

Orders of the Day — FINANCE (No. 2) BILL.

As amended, considered.

NEW CLAUSE.—(Exemption for voluntary hospitals.)

(1) Goods purchased on the order and for the use of a voluntary hospital are not chargeable goods for the purposes of this Part of this Act.

(2) In this Section "voluntary hospital" means an institution (not being an institution which is carried on for profit or which is maintained wholly or mainly at the expense of the rates) which provides medical or surgical treatment for in-patients.—[Mr. Storey.]

Brought up, and read the First time.

4.10 p.m.

Mr. Storey: I beg to move, "That the Clause be read a Second time."
After the discussion which we had last Thursday on the new Clause which I then submitted for the exemption of all hospitals from the Purchase Tax, I would not have placed this new Clause, exempting voluntary hospitals only, on the Paper if it had not been for certain remarks made by the Chancellor of the Exchequer when announcing the concession on newspapers. The Chancellor then said it was not in the national interest that there should be either a decrease in the circulation of newspapers or a diminution in their services to the public; that not only a free Press but a widely-distributed Press was a vital factor in the dissemination of information and the maintenance of public morale. He added that he had particularly in mind many local and provincial newspapers which served those interests so well and concluded that they would suffer and, with them, the public they serve. May I, on behalf of the voluntary hospitals paraphrase those remarks for the Chancellor of the Exchequer. He would then say: "It is not in the national interest that there should be either a decrease in the number of hospitals or a diminution of their services to the public. Not only a hospital system, but a widespread hospital system, is a vital factor in the treatment of sickness and the maintenance of public health." He would add that he had particularly in mind the London and provincial voluntary hospitals which serve our interests so well and he would conclude,

as before, that they would suffer and with them the public they serve.
I do not intend to repeat all the arguments which I used last week but I do repeat that I cannot believe that the Chancellor of the Exchequer wishes to raise revenue out of either voluntary subscriptions given for the treatment of the sick poor, or out of the pennies and twopences and threepences subscribed weekly by working people towards the cost of treatment of the sick—which, in one hospital I know, amounts to no less than half the income of that hospital. Nor do I believe that he wishes to raise revenue out of small contributions, based on means rather than on the actual cost, from those who wish to pay something towards the cost of their treatment when sick. But that is, in effect, what the Chancellor's proposal will mean. It could only have one effect and one result—to restrict the services which voluntary hospitals render to the public. Such restriction is unthinkable, particularly in wartime, when good health is essential to the maximum national effort, but such restriction will surely follow if the Chancellor persists in his proposal. Exemption is a practical proposition for, as I pointed out last week, the Canadian hospitals have for many years been exempted from a similar tax.

Mr. Stephen: On a point of Order. I understand that the hon. Member is Parliamentary Private Secretary to a Member of the Government. Are we to understand that he is moving this Amendment on behalf of the Government?

Mr. Speaker: That is not a point of Order.

Mr. Storey: The fact that I am Parliamentary Private Secretary to the Parliamentary Secretary to the Ministry of Health has nothing whatever to do with the voluntary hospitals, on whose behalf I am moving this Clause. Exemption is a practical proposition, because Canadian hospitals have enjoyed exemption from a similar tax for many years, and the definition of a voluntary hospital which I propose is also practical because it is one which was accepted by Parliament in the Voluntary Hospitals (Paying Patients) Act, 1936, for which I was responsible in this House. As to the cost of exemption, as near as we can estimate, allowing for


the concessions which the Chancellor of the Exchequer proposes with regard to medical and surgical appliances, it would be between £400,000 and £500,000, or an addition of about 7 per cent, to their total expenditure on purchase. That is not a large sum to the Chancellor but it is an immense one to the voluntary hospitals. But it is not so much the cost in money as the cost in the services that they can render to the public against which the hospitals appeal. That service is a very real one. The voluntary hospitals system plays a very special part in the hospital and health services of the country. Not only does it play its part in providing hospital accommodation and treatment and in looking after the welfare of the sick, but it is the training school of the whole medical profession, it is the foundation of all medical research and the means of harnessing much voluntary effort and self-sacrifice to the service of the sick and needy and of the State. The Chancellor of the Exchequer is too skilled a physician to need the services of an undertaker, because he ignores those of the surgeon when an operation is essential. I hope, therefore, that he will prescribe an operation on the Purchase Tax, exempt the voluntary hospitals and prolong their life and useful service to the State.

4.18 p.m.

Captain Elliston: I beg to Second the Motion.
As I supported the Amendment moved last week, I should like to say a few words in support of the appeal that my hon. Friend is making to the Chancellor of the Exchequer. Since I spoke last Thursday I have had several letters from large voluntary hospitals in various parts of the country, and in every case they have told me that their position from a financial point of view is desperately difficult. They are faced with increasing expenditure, especially in regard to milk, coal and other essential services of the hospital. If this Purchase Tax is coming on top of all their other difficulties, it is going to make their position almost desperate. I regret very much that my hon. Friend has felt it necessary to abandon the municipal hospitals. To my mind, they supply a direct public need to the health of the community and are as much deserving

of support as voluntary hospitals. No doubt my hon. Friend was influenced by the fact that the Chancellor drew a distinction in his final speech the other night. The inevitable result of the imposition of this tax on hospitals which are already in financial difficulties must be the restriction of services. They will have to look round for means of economy, and it must inevitably mean that in one direction or another the treatment available will be diminished. Therefore with all the emphasis that I can command I appeal to the Chancellor to reconsider his decision and to make this concession.

4.20 p.m.

Mr. Silkin: If it had been possible to give exemption to both municipal and voluntary hospitals, I, for one, should be supporting the hon. Member who has moved this Clause, but in the circumstances, the Chancellor of the Exchequer having refused to accept a new Clause on those lines, I feel that it would be grossly unfair and most unfortunate that municipal hospitals should have to pay the full amount of the Purchase Tax and voluntary hospitals be exempted. As between the two, I believe the municipal hospitals are more deserving of consideration. I think they are more efficient, they open the door much more widely than the voluntary hospitals and I think they are rendering a far greater service. The Chancellor not having seen his way to exempt municipal hospitals, I think voluntary hospitals should not be given preferential treatment. The case has been made that voluntary hospitals are supported by charitable funds and are carrying out charitable work. I can make a case for scores of similar organisations which are carrying on charitable work out of private funds, and doing equally good work in other directions, and if the Chancellor were to accept this Clause I should certainly ask him to accept similar Amendments on behalf of other organisations with which I, and I think most other Members, have great sympathy. Moreover, I feel that it will be quite impracticable. It is impossible for persons selling goods to distinguish between a voluntary and a municipal hospital. The tax will have been paid already by the wholesaler. I do not see how it would be possible to give this exemption even if the right hon. Gentleman was willing to agree to it. I hope


he will not accept this unless he is prepared to extend it to municipal hospitals.

4.23 p.m.

Sir Frank Sanderson: While I am very fully in favour of this Clause as one who takes a very keen interest in hospitals, I really cannot see how it is possible to make a case for voluntary as against municipal hospitals, and, unless my right hon. Friend can see his way to give this concession to both, I, for one, would certainly not support an Amendment for voluntary hospitals as against municipal. I understand that my right hon. Friend is unable to give way in regard to municipal hospitals. If we have to accept that—and I think we have—I do not think it is expedient or wise that this Clause for voluntary hospitals only should be proceeded with, and I hope my hon. Friend opposite will see his way to withdraw it.

4.24 p.m.

Mr. David Adams: I support the appeal which has been made to the Chancellor of the Exchequer to include the municipal hospitals together with the voluntary, otherwise it would not be equitable that this distinction should be made. In this Clause we are seeing one of the evils of the Purchase Tax. To increase the burden upon hospitals is contrary to the public interest, and the Purchase Tax does that. The argument which has been advanced in favour of voluntary hospitals in practice is unsound. Voluntary hospitals are in no way superior and, in the main, throughout the country they are inferior in the services which they render to the community. Local authorities are increasing their services, their clinics are being modernised, and the last word in consultations are being made available to the general public. The argument that the great training schools are to be found in the voluntary and not in the municipal hospitals does not bear examination. The estimate of £500,000 as the additional burden thrown on voluntary hospitals by the tax is, I believe, a very low one. I think if the war continues it will be multiplied. If we add to that the burden which will be thrown upon the municipal hospitals, the tax will be likely to have a tendency to cause those who can avoid using them to do so. I think the Chancellor really ought seriously to consider this in the national interest. The last

time in the history of a country to add burdens to remedial institutions must be in time of war.

4.28 p.m.

Dr. Edith Summerskill: I fully appreciate that the hon. Member realises how difficult it will be in the future for voluntary hospitals to make both ends meet, but surely he does not think that, if they are excluded from the Purchase Tax next year and the year after, we shall find these large voluntary hospitals in a nourishing condition. For years they have found it very difficult to exist at all. To exclude them from the Purchase Tax might help them a little, but it would only be a drop in the ocean. I can see the time next year when all our pockets will be so very empty that the number of people who are able to make contributions to the voluntary hospitals will be very limited. I would suggest to the hon. Member that he should devote his efforts to something much more constructive, namely to merge the voluntary hospitals with the municipal system.

Mr. Storey: If that is the hon. Lady's view, why did she not support my Clause last week, which would have helped that merger, which I desire as much as she does?

Dr. Summerskill: I would have supported it, but I did not know the hon. Member was moving it.

4.29 p.m.

The Chancellor of the Exchequer (Sir Kingsley Wood): I think I need not devote much time to my reply, not because I am not desirous of helping the voluntary hospitals if possible but because we debated the matter at considerable length, in principle at least, the other day. The House supported me on that occasion, though I recognised the force of the arguments then put forward. This Clause would give a concession to voluntary hospitals only. I think it is self-evident that that should not be done. Clearly such a concession would not be fair to municipal hospitals. In fact, if we included municipal and voluntary hospitals you would have to include also a variety of similar organisations, equally deserving of help, which we all desire to assist. Therefore, for practical reasons, I am


unable to accept the new Clause. I ask the House to realise what we have done, so far as this tax is concerned, for hospitals, both municipal and voluntary, and other similar institutions. X-ray apparatus, special hollowware, surgical instruments, anaesthetics, the more expensive drugs and surgical bandages have been made free for the purposes of hospitals and other institutions. The goods to be taxed, as far as the hospitals generally are concerned, represent some 7 per cent, of their expenditure. While I insist upon a contribution being made from hospitals and institutions, for reasons of principle and administrative difficulties, I feel that the tax will not place an undue burden upon them, and certainly will not play any part in the ultimate fate of the voluntary hospitals, one way or the other. I hope to see the voluntary hospitals continue in their splendid traditions and position, but it would be going to extremes to say that this tax will affect the position one way or the other. I hope that my hon. Friend will not press the new Clause.

Question, "That the Clause be read a Second time," put, and negatived.

CLAUSE 11.—(Assessment and collection of tax under Schedule E.)

4.33 p.m.

Mr. Woodburn: I beg to move, in page 7, line 15, to leave out from "for." to "requiring," in line 17.
The purpose of Clause 11 is to make provision for the assessment and collection of the new form of Income Tax, but in doing so, it introduces something quite separate from that inasmuch as it carries through a revolution in the machinery of assessment and changes circumstances which have existed for nearly 100 years. The Clause gives the Government power to abolish, whenever they please or whenever they need to do so, all the local Commissioners who have been in existence for nearly 100 years, or to take away a very large part of their functions. The purpose of this Amendment and other Amendments on the Paper is to bring this change to the notice of the House, and to obtain some explanation of it and some assurances to the people concerned that this thing will be done in a fair and square manner. There is a tendency in legislation nowadays to

do away with all outside arbiters. The courts of law give way to umpires. This Clause would enable the Government to do away with impartial arbiters and to have in their place partial arbiters. The Department would become judge in its own cause. There may be good reasons for doing this. A large part of the functions of the local Commissioners may have changed. In the early days many incomes were variable and subject to estimate and guesswork, but as time goes on, the incomes which are being taxed are more and more scientifically established. Therefore, estimating and judgment may be giving way very largely to calculation. But if this change is to be made, I suggest that a fair statement ought to be made to the House as to what is being done and the reasons for it. There ought to be some assurance to the people involved that it is not being done at the expense of servants of the State who have served the State well.

Sir William Davison: On a point of Order, Mr. Speaker. May I ask for your guidance as to whether there is to be a general discussion on the various Amendments on the Order Paper in the name of the hon. Member for East Stirling (Mr. Woodburn), my name and the names of other hon. Members, or whether they are to be called seriatim?

Mr. Speaker: All the Amendments to this Clause appear to me to deal with very much the same subject, and I think it would be convenient to the House if they were all discussed on the present Amendment.

Mr. Woodburn: Further to that point of Order. In the event of the discussion on my first Amendment not being satisfactory, I take it that the hon. Member for South Kensington (Sir W. Davison) and other hon. Members would have a right to move their Amendments.

Mr. Speaker: I shall put each Amendment separately.

Mr. Benson: There are two distinct points involved in the Amendments, Mr. Speaker. One is the question of the curtailment of certain functions of the Commissioners and the other deals definitely with the secrecy of the Income Tax, and I do not quite see how those two points can be discussed together.

Mr. Speaker: I do not propose to call the Amendment in the name of the hon. Member for Chesterfield (Mr. Benson)—in page 7, line 16, leave out "chargeable under Schedule E"—because it is outside the Ways and Means Resolution.

Mr. Benson: Further to the point of Order. I was not referring to that Amendment, because I had already heard that it was not to be called; but the Amendment now under discussion deals with certain functions of the Commissioners, whereas the Amendment in the names of my hon. Friend the Member for East Stirling (Mr. Woodburn) and myself—in page 7, line 18, leave out "any tax so chargeable" and insert "tax chargeable under Schedule E"—definitely has a bearing on the secrecy of the Income Tax.

Mr. Speaker: If the hon. Member dealt with that, probably it would be out of Order.

Mr. Woodburn: Continuing my remarks, I should like to know, first, what is to be done, and, secondly, how it is to be done. What assurances are to be given to these servants of the State that if changes are made those changes will be made in such a way as not to penalise good servants of the State? I should be the last person to say that institutions should be defended simply because they exist, but I believe that the Chancellor himself, some years ago, defended this case when it was once attacked in the House. He has now reversed the usual principle; he is now the gamekeper turned poacher. I ask the Chancellor to give us some assurance that this provision is not meant simply as a general attack on something that is being done properly, and if it is an attack on something that is being done improperly, I ask that we should be told what are the facts and the circumstances and by what methods it is proposed to deal with them.

4.39 p.m.

Sir W. Davison: I beg to Second the Amendment.
When the Finance Bill was considered in Committee, I moved an Amendment to Clause 11 to omit the power for assessments to be made by regulations by the Commissioners of Inland Revenue, and I pointed out that any such power given to a Government

Department would cut at the root of the whole principles on which Income Tax had been assessed for the last hundred years by the Commissioners of Income Tax. In replying, my right hon. Friend the Chancellor of the Exchequer gave a very definite assurance. He said:
There is no question of making any alteration, or in any way putting an end to the work of the Commissioners of Income Tax.—[OFFICIAL REPORT, 8th August, 1940; col. 476, Vol. 364.]
He said, further, that if this was not clear in the wording of the Clause, he would have words inserted before the Report stage which would make the point clear. It was to carry out that assurance that the Chancellor put down on the Paper an Amendment—in page 7, line 24, at the end, insert:
Provided that the said regulations shall not affect the powers or duties of the general or other commissioners as respects the signing, allowance or rectification of assessments or determination of appeals.
The words of that Amendment down to the word "commissioners" seem to me to carry out fully the assurance that was given by the Chancellor, but the further words:
as respects the signing, allowance or rectification of assessments or determination of appeals.
seriously circumscribe and limit the carrying out of the assurance. I would draw attention particularly to the fact that one power which appears to be taken away by these limiting words is the power of assessing, which is now to be given to the Commissioners of Inland Revenue, and apparently taken away from the general commissioners and their officials, who have a knowledge of the facts and circumstances in the various districts which will not be in the possession of Inland Revenue officials. I will give one or two examples of the local knowledge which is more than ever required to-day, owing to the speed at which it is desirable that assessments should be made. First, inspectors of taxes are frequently changed without the possibility of acquiring local knowledge. Secondly, if employers default in making returns of employés, the assessor is needed to obtain the information. Thirdly, if an employé has two employments, the assessor's knowledge is wanted as only one employment would appear in the employer's return. Fourthly, in cases of difference between employer and employé, the assessor must


decide between them. Fifthly, in all cases of estimate the assessor's knowledge must be called in. For these reasons, I submit that it is more than ever necessary that the Commissioners and their assessors should be maintained and the power should not be transferred to officials in a Government Department. I hope that my right hon. Friend the Chancellor will accept the Amendment on the Paper in the names of the hon. Member for East Stirling (Mr. Woodburn) and myself to leave out from the word "commissioners" to the end of his Amendment. This would make it clear that assessments would still remain the duty of the Commissioners and their officials.

4.44 p.m.

Mr. Benson: I think that as the Chancellor listened to the last two speeches his breast must have swelled with pride. My hon. Friend the Member for East Stirling (Mr. Woodburn) referred to Clause 11 as bringing about a revolution in our Income Tax machinery and the hon. Member for South Kensington (Sir W. Davison) described it as cutting at the root of the whole principles on which Income Tax had been assessed for the last hundred years. The fact is that the Clause is a very tiny and piecemeal attempt to bring the machinery of Income Tax assessment in a large' part of the country up to the standard which obtains in other parts of the country.

Sir W. Davison: It makes a change.

Mr. Benson: It makes a change in that it brings the machinery of assessment in some parts of the country up to the standard which obtains in other parts. That is a very necessary change. It is proposed to allow the inspectors of taxes to do the work which in some parts of the country is now done by the clerk to the Commissioners. That work is purely routine clerical work. The clerks to the Commissioners and the Assessors, to whom the hon. Member for Kensington (Sir W. Davison) referred, have no special technical knowledge as compared with the inspectors of taxes. Nor have they the trained staff to deal with the real work of assessment. They merely total up the books prepared by the inspectors of taxes and do copying work within the scope of any office boy. Unfortunately, in order to do this purely clerical work

they have to take away the assessment books, with the result that these go backwards and forwards six and seven times a year. As a consequence the work of the inspectors is held up, and there are delays in repayment, in adjustment and assessments. It is the taxpayer who suffers.
As a matter of fact, this matter has been under consideration for many years, and it was considered by the Royal Commission on Income Tax in 1919, whose report the hon. Member for South Kensington should read. Let him examine the evidence of Mr. Copley Hewitt, Clerk to the London Commissioners, on this point, and his cross-examination by Sir Josiah Stamp and Sir William McClintock. It was the most pitiful and painful exhibition I have ever read. They treated Mr. Hewitt like a small boy treats a fly. They pulled off his limbs one after the other until only the bleeding corpse was left. I have never seen a more terrible cross-examination in my life. They finally reported that the whole system was archaic and obsolete. It is this system which the hon. Member for South Kensington and my hon. Friend the Member for East Stirling (Mr. Woodburn) propose to retain, and which they say if it were abolished would introduce a revolution. But that revolution has taken place already in half of the country. The system has been retained because it is a vested interest of the Clerks who pull wires to defend it whenever it is questioned.
The right hon. Gentleman's advisers have come to him and said that now that he is expanding the area of Schedule E, unless it is taken out of the hands of the Clerks to the Commissioners, he will get no tax. The machinery will break down. Instead of doing this piecemeal, he ought to have abolished these clerical functions of the Commissioners and put Income Tax assessment on a sane basis. The real function of the Commissioners is to hear appeals, and that will not be touched. I come from Manchester, and I know that the system proposed under Schedule E applies to the whole of the Schedules. It may surprise the hon. Member for South Kensington to know that the Kensington area is notorious in Inland Revenue circles for delay and arrears, and this undoubtedly is due to the bottleneck—the Clerk to the Commissioners.

Mr. Woodburn: I think that the hon. Member does not fully appreciate that Clause 11 would in fact take away that right of appeal, or at least give power to make provision for taking away that right of appeal. Therefore the whole purpose of the Amendment is to obtain a statement from the Chancellor as to what is being done. Even a minor revolution like this should not be carried through by small words put in a Finance Bill incidentally instead of openly.

Sir W. Davison: The hon. Member for Chesterfield (Mr. Benson) entirely supports the contention of the hon. Member for East Stirling (Mr. Woodburn) and myself that by a side issue the principles which have governed the collection of Income Tax in this country for years, and which have been the admiration of the world for the smooth way in which the work has been carried into effect, are being undermined. In any case there is no necessity to do it here, because the assessments for the present year have already been made.

Mr. Benson: There is no principle involved. It is the ordinary clerical work involving weeks and weeks of delay. The work is a nice little sinecure for those who carry it out, and I hope the Chancellor will resist the Amendment.

4.50 p.m.

Sir K. Wood: Perhaps the House will allow me to present the case as I see it, and I do not think I shall get extremely heated about the matter. Clause 11 is introduced into the Bill to make a change which has been generally approved by the House with regard to the deduction by employers of the wages of the employés both for the convenience of the employés and for revenue. It is under these circumstances that the Clause has been drafted, and it is for that particular purpose only. I may say, at once, in dealing with the Amendment of the hon. Member for East Stirling (Mr. Woodburn) that if one sought to delete in the first part of Clause 11, the words
for the assessment and collection of tax chargeable under Schedule E including in particular provisions for requiring …
it might well be argued that it would be open to any employé to object to the employer making deductions in November on the grounds that the tax was not due until 1st January. That would up-

set the whole scheme, under which the tax due in January will be deducted over the six months from November to April. Without interfering in any way with the existing powers of the Commissioners of Taxes so far as the taxpayers are concerned, it is important that this new scheme should work efficiently and quickly. It is therefore necessary, as was indicated by the hon. Member for Chesterfield (Mr. Benson), to make certain rearrangements as to clerical work, and to deal with what I am afraid I must call, without undue heat, the present antiquated and cumbersome procedure, so as to enable the work to be undertaken in the shortest possible time. If anyone looks at the Income Tax Acts, they will find set forth in a variety of details the exact procedure to be followed, and the way in which certain routine work is to be performed. In that respect certain duties are cast upon the Clerks of the Commissioners, and it is in this connection, and this connection only, that a change is to be made. Inasmuch as these duties are on the Clerks of the Commissioners, who are acting for the Commissioners themselves, it may well be said these are the duties of the Commissioners.
The hon. Member for South Kensington (Sir W. Davison) criticised my Amendment, and said that it should stop at the word "Commissioners." If I did so, it would defeat the purpose of the small change we propose to make. Consequently, if both Amendments were accepted, it might, and I will put it no higher than that, in certain areas result that the notice might not reach the employers in sufficient time for them to make the deduction of tax at the commencement of November, and we might then have to face the breakdown of the whole of this machinery which every part of the House desires to be put into operation at once. In that respect both employers and employés would be very adversely affected, and I do not think anyone would desire that to be done. There might also be, as a result, widespread complaints, because in one part of the country things might not go smoothly compared with other parts. I wish to make it plain that my Amendment on the Paper, and the Clause in the Bill, in no way affect the powers or duties of the Commissioners in regard to the signing, allowance or rectification of assessments or determination of appeals.


These powers are, in fact, the main functions of the Commissioners. The other matters with which we are dealing to-day are matters of a very minor order, and deal with procedure.
I want to make it absolutely clear, because a number of people are concerned in this—and I do not criticise their work, because in many respects they are doing an excellent job—that the Regulations to be made by the Commissioners of Inland Revenue in this Clause cannot, in the first place, affect the interests of the taxpayer—that is the existing function of the local Commissioners of Income Tax, and the matter of signing and hearing appeals will be retained as is made abundantly clear in the Amendment I have put on the Order Paper. Assessments will continue to be signed and allowed by the local Commissioners, who will, of course continue to deal with appeals, and the local Commissioners' powers as regards the quantum of assessment and the rights of taxpayers in appeals are fully safeguarded. I had representations made to me this morning by some old friends of mine—the assessors. But this will not affect the work of the assessors except in some minor clerical way. We shall, of course, continue as before to take full advantage of their local knowledge. On the other hand, we are taking steps, which, I believe, the House will support, to avoid delays of the kind I have indicated, so that when the employers are called upon to play the part which we are asking them to do—and I am glad to say that I have had no complaints or representations on the matter from employers in this country, whom we are asking to carry a considerable burden in this matter—they shall receive their instructions punctually and as accurately as is humanly possible. That is the least thing we can do for the employers when they play their part. That is the main purpose of this Clause. It is a wise and advisable step to take in order to see that this scheme goes forward with the greatest possible chance of success.

Mr. Woodburn: What is to happen to any clerical staff of these assessors in the event of the Inland Revenue taking over the whole job?

Sir K. Wood: I hope that in cases like that we shall be able to arrange for the

staffs to be transferred to the other office. We shall endeavour to do that, and conversations have been proceeding very smoothly on the matter, and, I think, the necessary arrangement can be made to the mutual satisfaction of each side.

Sir W. Davison: I understand that the addition of the words:
the signing, allowance or rectification of assessments or determination of appeals
will not involve taking away from the Commissioners their powers of making assessments and rectifications and giving them to the Commissioners of Inland Revenue.

Sir K. Wood: I put that point to the Solicitor-General, and he advised me that when they sign they take authority for the assessments.

5.0 p.m.

Mr. Pethick-Lawrence: The way in which the Chancellor has dealt with the matters in this Clause is fully in accord with the position as I have understood it, and I hope that in a subsequent Finance Bill he will consider whether the change mentioned by my hon. Friend the Member for Chesterfield (Mr. Benson) can be made. When we come to the Third Reading perhaps the right hon. Gentleman will give me an answer to the question whether he has considered the method, which was talked about in an earlier stage, by which the deductions by employers from their employés will be credited to a special fund at the bank. This will save any danger of leakage and also save time.

Mr. Woodburn: In view of the explanation given by the Chancellor, I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

5.2 p.m.

Mr. Benson: I beg to move, in page 7, line 18, to leave out "any tax so chargeable," and to insert "tax chargeable under Schedule E."
The effect of the Amendment is to limit the power of the Commissioners to make regulations giving the employers power to deduct more in tax than will be appropriate to Schedule E. Under the Clause it seems to me that employer could deduct any tax.

Sir K. Wood: I am advised that that is not so. This applies only to assessment for tax under Schedule E, and that will


be the only matter subject to deduction. If an employé has any other income, that will be collected in the usual way and not through the employer.

Mr. Benson: At what rate will Schedule E be deducted? That is the difficulty, because by simple calculations from the rate of deduction an employer could calculate an employé's income.

Amendment, by leave, withdrawn.

Amendment made: In page 7, line 24, at the end, insert:
Provided that the said regulations shall not affect the powers or duties of the general or other commissioners as respects the signing, allowance, or rectification of assessments or determination of appeals."—[Sir K. Wood.]

CLAUSE 12.—(Disallowance of certain payments in respect of war risks.)

5.4 p.m.

Sir Joseph Lamb: I beg to move, in page 8, line 38, at the end, to insert:
(iii) any mutual war risk insurance scheme for agriculture where such scheme is recognised by the Board of Trade.
I apologise to the House for moving a manuscript Amendment, but the time has been short between the Committee and Report stages. I have not been able to get it on the Paper because only this morning I received an influential deputation asking that this matter should be cleared up. It is an important matter to agriculture, but, owing to the short reference made to it on the Committee stage by the Financial Secretary, there is uncertainty in the industry about the position. When the Government introduced their war risks insurance scheme, agriculture was included, but, owing to the high rates and the inability of the industry to pay them, it was at its own request excluded from the scheme. The industry then set up a war mutual insurance scheme which undertook this work at much lower rate. Had agriculturists remained in the Government scheme they would under the Bill have been allowed to deduct the premiums from their Income Tax returns, but as they had to be excluded and put into a special scheme, there is doubt whether they can deduct the premiums in respect of this scheme. I am not asking for this concession on behalf of the insurance companies; I am doing so on behalf of agriculture. We

know that there is a great shortage of capital in the industry, and that farmers have to conserve all they can for food production. I have provided in the Amendment that the scheme must be approved by the Board of Trade. That will be a guarantee against bogus schemes being put up with an ulterior purpose, and will ensure that the scheme is one which is simply intended to take the place of the Government scheme which was not applicable to agriculture.

5.8 p.m.

Mr. Price: I beg to second the Amendment.
The reason why agriculture could not go into the original scheme was that the premiums were too high. The risks of war damage to agricultural property are not so serious as those to industrial property because it is in a different category. In the State insurance scheme the premiums were much too high for agriculture because the scheme was keyed up to meet the level of industrial risks. Agriculture had to be left out because it could not face the premiums. No provision has been made for that industry in any other scheme, and agriculturists have had to produce their own scheme. Naturally the Treasury will be concerned that no loophole is created through which there might be evasion of Income Tax, as there could be if the scheme were not controlled, but the Amendment provides that the scheme shall be approved by a Government Department. The matter is thus made watertight.

5.10 p.m.

Mr. Graham White: I have no means of knowing what answer the Chancellor may give to this proposal. There is a considerable disadvantage in having a manuscript Amendment put before us, for it gives us little time to consider it. I speak with some knowledge of these matters, however, and it seems to me that the Amendment strikes at the foundation of the whole principle of insurance. My hon. Friend the Member for Stone (Sir J. Lamb) and my hon. Friend the Member for the Forest of Dean (Mr. Price) have adduced as a reason why the Amendment should be accepted that the scheme would be approved by the Board of Trade. That is wholly irrelevant to the issue involved. The issue is whether any collection of people engaged in a business or occupa-


tion—I understand the Electricity Commission has something of the kind on foot—should be able to make a mutual arrangement—

Sir J. Lamb: I put the Board of Trade in the Amendment, but I am willing, if the Chancellor desires, to accept any other Government Department. I put it in for the purpose of showing that it must be a genuine insurance scheme.

Mr. White: The authority which has to approve the form of insurance is irrelevant to the issue. The whole point is whether persons can make mutual arrangements to give themselves some measure of insurance against war risk, and then be able to charge the premiums, which might be at any level, as an allowance for Income Tax purposes. I rise on the spur of the moment to point out the difficulties as I have some responsibility in connection with the Board of Trade Advisory Committee, and I hope that the Chancellor will give the proposal careful consideration before he accepts it.

5.13 p.m.

Mr. Barnes: The principle involved in this Amendment was raised by me and some hon. Friends on Clause 12 during the Committee stage. I am not unsympathetic towards the problem which the hon. Member for Stone (Sir J. Lamb) is introducing, but it raises a difficulty similar to that which confronted us on the proposed new Clause dealing with voluntary hospitals. I trust that the Chancellor will be able to meet the problems which the Amendment raises, but I submit that it cannot be met by dealing with the difficulty of agricultural insurance alone. As I understand the position when we left it during the Committee stage, the Chancellor was not unsympathetic to the purpose which many organisations have in mind in endeavouring to tide their members over the grave difficulties and hardships that might arise from war damage. I understood that the Chancellor was prepared to look into the whole problem and see whether it could be carried a stage further by consultation and negotiation. If the matter is not finally settled and the Chancellor is prepared to meet organisations to discuss the difficulty, those interested in agriculture and others might have an opportunity of

exploring the problem. There are certain precedents on a voluntary basis.
On Clause 12 we had the difficulty on the Committee stage that the Treasury could not consider any scheme that would permit an evasion of Income Tax. It is not the purpose of a good many people to-day to avoid their legitimate tax liabilities. There is a desire on the part of those who have a mutual interest in particular trades and businesses to prevent them being ruined as a result of war damage, and I suggest that we ought to foster that spirit. The State has definitely refused to accept liability to make good such damage, and ought to look with sympathy on the efforts of those who are prepared to deal with the situation by voluntary means. Those for whom I speak would be prepared, if any steps were taken to meet these difficulties, to agree that any surplus funds after meeting claims for compensation should find their way into an investment with the State for the time being, thus helping to meet the cost of the war, and would be prepared to agree to regulations which would enable the Treasury to safeguard any distribution of that surplus afterwards so as to ensure that it did not provide a means of evading taxation. I sincerely trust that the Chancellor of the Exchequer, having reflected upon what was said in the Debate during the Committee stage, will be able to indicate that he is prepared to consider schemes or to consult with those who are interested in such proposals.

5.17 p.m.

The Financial Secretary to the Treasury (Captain Crookshank): The hon. Member for East Ham, South (Mr. Barnes) has rather extended the scope of this discussion. This is a small Amendment dealing with a particular agricultural scheme, and I could not go further on the general issue than what was said by my right hon. Friend on the Committee stage. What was said by him and by me on that occasion is on record for all who want to read it. My right hon. Friend is always very approachable, and anyone who wants to consult him on the subject will be at liberty to do so, but he made it clear then, and wants it to be made clear now, that he would not be prepared to consider any proposal which would run contrary to the purpose of this Clause. It is a Clause which


deals with the disallowance of certain payments in the matter of assessment for Income Tax and, as a consequence, E.P.T. as well. I am not now going into the whole question, but will try to deal briefly with the case presented by my hon. Friend the Member for Stone (Sir J. Lamb). He asked that there should be special exemption for payments to any mutual war risk insurance scheme in agriculture provided it was a scheme approved by the Board of Trade. The Board of Trade is not at present charged with the function of approving any of these schemes. He says that he does not mind whether the scheme is approved by the Board of Trade or anybody else, so long as it is approved.

Sir J. Lamb: By some Government Department.

Captain Crookshank: He suggests that some Government Department should "vet" the scheme and say that it is all right. My reply to that is that the scheme is either an insurance scheme or it is not. Insurance schemes have for a long time past received certain consideration. This is a mutual war risk insurance scheme. It is not an insurance scheme because ex hypothesi it is a mutual war risks scheme, and being, to use his own words, a war risk scheme, it is something which purports to be an insurance against a risk which is admitted on all sides to be uninsurable. That is the answer—that it is not an insurance scheme. I think he implied that this particular scheme had been authorised in some way by the Board of Trade, but I hope that impression will not go out, because all that the Board of Trade have ever had to do with this matter has been to restrict the advertisements. An Act was passed for the restriction of advertisements of war risk insurance schemes at the end of last year, and all that the Board of Trade has to do is to decide whether the advertisements which are sent out are in the proper form, but that does not imply any responsibility for the soundness or otherwise of a scheme.

Sir J. Lamb: Surely the Board of Trade do rather more than that. There must be some reason why they permit publication of some advertisements and not of others. The scheme must be approved.

Captain Crookshank: All they have to do is to see that it is a genuine scheme and not a fraud. That is about as far as it goes. They have nothing to do with whether it is good in the insurance sense or bad in the insurance sense, but that is the sort of approval which would be necessary, presumably, if we were to import into the Clause such a concession as the hon. Member asked. Already there are provisos (i) and (ii) in Subsection 3 (b), and the hon. Member wants to add a third to them. While we all have sympathy with agriculture, for times are very difficult for the farmers, we cannot agree that a scheme, just because it is concerned with agriculture, which does not fall within the limits which we have set, should on that account have preferential treatment. The matter was discussed on a larger scale in connection with co-operative undertakings during the Committee stage. I am afraid that my right hon. Friend is not able to accept this Amendment.

Sir J. Lamb: I am sorry that the right hon. and gallant Gentleman is not able to accept my Amendment, but he did not answer my point about the injustice of allowing this concession in the case of a Government scheme and not allowing it because those concerned here, for reasons outside their control, could not put up a Government scheme.

Mr. White: Is it realised that if the facility asked for in this Amendment were to be granted, it would have to be extended to 20 other schemes of a like nature which are already operating?

Captain Crookshank: And goodness knows how many others.

Amendment negatived.

CLAUSE 13.—(Special provisions as to mines, oil wells, etc.)

5.23 p.m.

Sir George Broadbridge: I beg to move, in page 10, line 17, at the end, to insert:
(6) Upon an application made with respect to any class of trades or businesses consisting of the getting of minerals or oil from any mine, oil well, or similar natural source of a wasting nature and of which the estimated life at the current rate of production is less than twenty-five years, the Board of Referees may, by Order, direct that special provisions shall apply with regard to the assessment of standard profits for the purposes of excess profits tax and shall permit the deduction


from such profits of such amount as the Board of Referees may, with the consent of the Treasury, agree as being the amount by which the value of the mineral, oil or other natural resources belonging to the trade or business concerned has been diminished during the year.
I will deal with this Amendment in tabloid form. The reason for moving this Amendment is that the 100 per cent. Excess Profits Tax is having a most disastrous effect upon alluvial tin mines which can be said to have short lives of from 10 to 20 years. To-day the Government require these mines to force their output and produce the largest amount of tin possible, but in consequence of the 100 per cent. Excess Profits Tax these properties are suffering very badly indeed. Every ton of tin taken out of these properties is depleting their capital ore resources. Let me give an illustration. An English company operating in the Colonies produces, say, 700 tons per annum according to the quota in the standard year. That would give a profit of about £60,000. Under the quota today that mine could produce 1,000 tons, with a profit of about £100,000, but the company would have to pay the whole of the profit from the extra 300 tons, namely, about £40,000, in Excess Profits Tax. In other words, no benefit would accrue to the company for those extra 300 tons. That tin cannot be replaced and is a part of the company's valuable capital ore reserve. If these companies continue to produce on these lines not only will they do so without profit upon the additional output but they will at the same time be shortening the lives of the mines. The Excess Profits Tax is, therefore, a most serious matter for these short-lived alluvial mines.
If this state of things continued, the result might be this: The present price of tin enables companies to produce less, should they so desire, and yet, while earning sufficient, to avoid incurring Excess Profits Tax at all. This policy of prudence would also have another good feature, that they would not be drawing so unremuneratively upon their ore reserves. But as the Government want the commodity for war purposes the mineowners naturally do not want to adopt this policy if it can be avoided, and this Amendment will give to the Board of Referees the authority, where a mineral

or oil property at the present rate of output has an estimated life of 25 years, to direct that special provisions shall apply with regard to the assessment of standard profits for the purpose of Excess Profits Tax, and, further, permit the deduction from such profits of such amount as the Board of Referees may agree as being the amount by which the value of the mineral, oil or other natural resources belonging to the trade or business concerned has been diminished during the year. I hope the Chancellor will see his way to accept this Amendment, because if the present state of affairs continues the Empire's alluvial mining industry will be in a disastrous state.

Mr. Spens: I beg formally to second the Amendment.

5.30 p.m.

The Solicitor-General (Sir William Jowitt): I think that I can satisfy the hon. Member that the Amendment which he is moving would have exactly the opposite effect to that which he desires. It is absolutely impossible, in fact, for us to consider this Amendment. I can well understand the objection which may be entertained to 100 per cent. Excess Profits Tax and to its being said that the concessions in Clause 13 are not adequate, in that we have imposed a ceiling of 4 per cent., but I cannot understand how anyone accepting these principles can think that the present Amendment provides a satisfactory method of dealing with this problem. I would remind the hon. Member that Clause 13 applies only to what I might call the substituted standard, where you have to have resort to a percentage on capital because the person concerned has had an unfortunate time, or because it is a new business or because, although an old business, it has had brought into it new capital. In that case we allow an increase on the normal percentage, up to 4 per cent. That applies to these very companies which exist by getting minerals or oil from oil wells or other similar sources of a wasting nature.
In the Amendment, the hon. Member proposes to introduce a new class. Be it observed that the Amendment refers to a wasting asset
of which the estimated life … is less than twenty-five years.
Estimated by whom, and from when? It is notoriously difficult, and I might even


say it is impossible, to estimate how much there is left in the ground, the hypothesis being that you have not worked it. In the examples of which I am aware of estimates being made, they have always resulted in second estimates which have completely falsified the first. These estimates are to be made upon an assumption that the current rate of production is continued. Why assume that? I have heard it suggested that this war will last for 25 years; why should you assume that the current rate of production will last for 25 years? When you have got over that difficulty, somebody who is going to make an estimate—nobody knows how—will put the company into one category or the other. If it is a 24-year estimate, these consequences follow, but if it is a 26-year estimate a completely different code applies, which applies only in the case of the substituted standard.
Suppose it is a 24-year estimate; what happens then? The Board of Referees are to direct that special conditions apply. Instead of the House of Commons deciding what the tax principles shall be, the Board of Referees, uncontrolled, and the Treasury, who also are not the taxing authority, are to fix it. How does the hon. Member propose to do this? I ask him to follow the words of his own Amendment:
The Board of Referees may, by Order, direct that special provisions shall apply with regard to the assessment of standard profits for the purposes of excess profits tax and shall permit the deduction from such profits"—
that is to say, the standard profits, "of such amounts," et cetera. The more you deduct from the standard profit, the worse the Excess Profits Tax gets. The Excess Profits Tax is the difference between the standard profit and the profits in the current year. Therefore, the higher you make this standard profit, the higher the Excess Profits Tax will be that you have to pay. The hon. Member proposes that the Board of Referees, acting on some absolutely undefined principle, with no limit or check at ail, shall deduct something from this standard profit which shall make the persons concerned pay even more Excess Profits Tax. I think the hon. Member will see that to make the Amendment work in the sense in which he wants it, we must substitute for his words, "deduction from," the words "addition to," because

you must make your standard profit higher in order to make the amount of the Excess Profits Tax higher. I think I have said enough on this Amendment. The Chancellor of the Exchequer is sympathetic to the case which the hon. Member has put up, but it is impossible for us to accept the Amendment, which would realty have the effect of making things much harder for the people whom the hon. Member represents.

Sir G. Broadbridge: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

CLAUSE 20.—(Orders as to Purchase Tax.)

5.36 p.m.

Sir K. Wood: I beg to move, in page 15, line 9, at the end, to insert:
(2) Where the Treasury propose to make an order under this Section they shall publish, in such manner as they think best for informing persons appearing to them to be likely to be affected, notice of the proposal indicating generally the class of goods proposed to be dealt with by the order and the nature of the direction proposed to be given thereby, and the order shall not be made earlier than the expiration of fourteen days from the first publication of the notice.
This Amendment is put forward to carry out an undertaking which I gave during the Committee stage of the Bill. The House will recollect that the Clause deals with the power of the Treasury to make Orders in relation to the Purchase Tax, and an Order so made comes before the House as a draft. The Order does not have effect until the House has approved of it. Some hon. Members may recollect that I gave an undertaking that these powers would be used only in minor matters and for the removal of anomalies disclosed by experience. Notwithstanding that, they would, of course, have their effect upon the traders concerned, and it was therefore suggested in the course of the Debate that it was not unreasonable, before a draft Order was submitted to the House for approval, that notice of the intention to make an Order should be given and that the notice should indicate generally the class of goods to be dealt with and the nature of the change.
We are leaving the matter open as to exactly what publication or publications should be used, because obviously a great deal depends upon the class of goods which are affected. In one case the pub-


lication may be one trade journal and in another case it may be some other. Under this proposal the matter will be brought directly before those who are interested. The Amendment requires also a period of at least 14 days to pass between the publication of the notice and the laying of the draft for Parliamentary approval. I think that will give sufficient time for the usual conversations to take place between the Department and the trade. These discussions often result in clearing up many matters of difficulty. We shall thus not only be bringing the matter before the House but bringing it to the notice of the trades concerned.
In connection with this Clause, I want to refer to another undertaking which I gave to the hon. Member for Spen Valley (Mr. Woolley) and the hon. Member for Swindon (Mr. Wakefield). I promised during the Committee stage to see whether it was possible to ensure that notice should be given of the medicine and drugs which should be exempt under the part of the Schedule dealing with methanes. I propose to do this, using the procedure under Clause 20, which gives the Treasury power to direct, among other things, that the tax should not be chargeable in respect of goods in any class. The Order is laid before the House, but it does not have effect before it is approved by affirmative Resolution. Therefore we propose to give notice as early as possible of the intentions about these costly drugs. The notice will be published in an official publication and in other ways, and when we have received representations upon the list I shall, as I have done before, consult my right hon. Friend the Minister of Health, and the draft Order will then be prepared and laid before Parliament for approval.

Sir Irving Albery: Why is it necessary, in the Amendment, to put in the word "generally"?

Sir K. Wood: That was the form which the Parliamentary draftsman thought best. We shall endeavour to give full information to the trades. It may be that some of the lists will be very long and contain a very large number of articles, but we shall endeavour to arrange matters so that the trades affected really know what is happening.

Colonel Gretton: The Amendment is on a matter which was brought to the notice of the Chancellor of the Exchequer by hon. Members during the Committee stage, and it meets the points which were raised. It is not quite all that we wanted, but one does not get all that one asks for. In principle it meets our views, and I thank the Chancellor of the Exchequer for the action which he has taken.

Amendment agreed to.

Orders of the Day — SEVENTH SCHEDULE.—(Purchase Tax (Chargeable Goods).)

5.43 p.m.

Mr. Barnes: I beg to move, in page 41, line 11, col. 3, after "wear," to insert:
and school garments that are in the nature of school uniforms.
When the Solicitor-General was defining the term "young children," he indicated that the trade sizes in children's wear were normally made up for children from 12 to 14 years of age. During the discussion, the hardship to school children attending secondary and other schools beyond the age of 14 came under consideration. When the problem was submitted to the Chancellor of the Exchequer, he did not appear to be unsympathetic towards the point. When we were discussing trade sizes, the difficulty was considered of dealing with children who were out of the normal sizes, and it was recognised that the trade could not meet a difficulty of that kind. When we come to school garments that are part of a uniform, that trade difficulty disappears. When I put down this Amendment, I recognised that it was impossible to frame it in order to cover those children in secondary schools through State-aided scholarships. The difficulty which I see in regard to this Amendment is that school uniforms for the sons and daughters of comfortably-off persons cannot be distinguished from other school uniforms. It appears to me that one is not justified in placing burdens upon parents in straightened circumstances who are meeting considerable hardships in order to give their children better education, merely on the ground that the acceptance of this Amendment would represent a relief to persons in more comfortable circumstances. Therefore, although I recognise the difficulty, I think this hardship should be met even if by so doing other


people escape through the net which the Chancellor wishes to spread for them and which I recognise is not an illegitimate desire on his part.
If you take the burdens of the average householder, whether wage earners or comfortably off, as a general rule the time when expenses are heaviest is when the children are in the stage of being educated, and, therefore, I feel that this is a reasonable request to make to the Chancellor. I thought I detected a sympathetic gleam in his eyes when we were discussing this particular Amendment, and I thought I would chance the possibility of that sympathy having developed into quite a warm desire to meet this difficulty. I therefore put down this Amendment on the Report stage for the purpose of ascertaining whether the Chancellor will meet what I think he will agree is a real difficulty, and I trust that the fact that some people whom he thinks ought to pay the charge will escape will not prevent him from meeting the wide range of persons and families who are interested in secondary school education.

5.48 p.m.

Mr. R. C. Morrison: I do not wish to add to the statement of my hon. Friend beyond saying that I have no doubt that the Chancellor will accept this Amendment if it is administratively workable. I do not profess to be in a position to answer that question, so I must await the answer from the Chancellor as to whether it is administratively workable which will decide whether the Chancellor will accept this Amendment or not.

5.49 p.m.

Sir K. Wood: The hon. Gentleman has put forward his case with his usual power and force. I think he always adds to the value of his speeches by his good humour and the way in which he treats the House. Having examined this matter, I must tell the hon. Gentleman and the House that there is a consideration which, unfortunately, does not allow me to accept the Amendment. In the first place, we must remember that the garments of ordinary children up to 14 are free of tax. With regard to the others above that age and up to the age of 16, of which the hon. Member was speaking, I was discussing this matter with my hon. Friend the Parliamentary Secretary to the Board of Education,

whose experience of education is such that I do not possess, and I think it is possible that in cases of that kind a grant can be obtained with the object of assisting parents in relation to this kind of expense. As the hon. Gentleman anticipated, the trouble is the administrative difficulty. The Solicitor-General and I talked this over this morning, and it was interesting to see that this Amendment affects tail coats, fancy striped blazers and tunics of Roedean and Cheltenham ladies' colleges. It might almost be said that although this Amendment would help a number of people whom we desire to help, it would also help the people who can afford to pay for these things. Apart from that, there is also the administrative difficulty. It is impossible to say, in respect of certain goods at the wholesale stage, whether, for instance, a flannel suit or a pair of flannel trousers are intended for a purpose of this kind or not. At that stage one cannot tell to what use the article will be put, whether it would be put to a non-taxable use or otherwise. That is one of the reasons why I cannot accept this proposal. I would add that I think I have done my share in the way of concessions. Apart from that, I cannot accept this Amendment for administrative reasons.

Mr. Barnes: I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

5.53 p.m.

Sir K. Wood: I beg to move, in page 41, line 16, column 3, at the end, to insert "or quarrymen or moulders."
This Amendment carries out an undertaking which I gave to hon. Members opposite that in this Schedule I would make provision for protective boots designed for use by miners, quarrymen or moulders. I think it can be said that where these boots are designed for quarrymen or moulders it is right to include them in the Schedule, and I propose to do so. The next Amendment is consequential from this Amendment.

Amendment agreed to.

Further Amendment made: In page 41, line 21, column 3, at the end, insert "or quarrymen."—[Sir K. Wood.]

Sir K. Wood: I beg to move, in page 41, line 21, column 3, at the end, to insert:
Sewing thread and mending and knitting wool.


I also gave an undertaking to make it quite plain that sewing thread and mending and knitting wool should be exempted from tax.

Amendment agreed to.

5.54 p.m.

Mr. Frankel: I beg to move, in page 41, line 32, column I, after "bedding," to insert "(other than blankets)."
If this Amendment has no other virtue, it is at least easily administratively possible, and would not contain any of the difficulties mentioned by the Chancellor in relation to a previous Amendment. The Chancellor also said that he had gone a long way in making concessions, but I hope that he will be able to go one step further and exclude blankets from this tax. In previous discussions the whole subject of bedding was discussed by the Committee and the Chancellor did not find it possible to exclude bedding, but I think most hon. Members will agree that sympathetic consideration is needed in this respect. It is a most expensive necessity which a householder is compelled to buy from time to time. It is not the sort of expenditure which can be dispensed with even in war-time. It is not an expenditure which can be postponed in many cases, and especially in homes with children, for reasons which I need not give the House, it is a recurring expense. I agree in the main with the purpose of this Bill and I wish to support it to its closing stages, but I hope the Chancellor will see his way to make this further concession which I am sure will be of very great value in just the kind of homes which none of us wants to injure any more than we need. When one thinks of last winter and the terribly cold spell which we had, I think it will be appreciated that this question of blankets is one of the most important of household necessities.

5.57 p.m.

Mr. Pethick-Lawrence: I think blankets come into a very special category by themselves. For one thing the raw material is grown in this country and special industries are required for making blankets and, therefore, they would not be easily converted into factories for other purposes. I

cannot feel that the limitation of the sale of blankets will be of any great economy to the country. At the same time the taxation of blankets will be a real expense to the people and particularly the poorest of the population. There may be some slight difficulty, but I should have thought it was administratively possible to distinguish between blankets for beds and other forms of covering. This Amendment intends to exclude the taxation of blankets altogether. If the Chancellor cannot go as far as that, will he go to the extent of putting them into column 2? I cannot see the Chancellor would lose a great deal of revenue, and I hope he will see his way to make a further concession.

5.59 p.m.

The Financial Secretary to the Treasury (Captain Crookshank): In supporting the Amendment the right hon. Gentleman asked me whether it would not be administratively possible to distinguish between different kinds of blankets. It is not possible. It has been considered— as, of course, every item in this Schedule has been considered—from the point of view of the purposes of the Bill as well as to see what is administratively possible, and I am afraid the answer is that it cannot be done. There is a considerable manufacture of blankets and bed coverings of an expensive nature. A luxury blanket certainly does exist. If one is to deal with bedding at all I should have thought it would be very difficult to justify the exclusion of blankets—I speak subject to correction— because I should have thought that among the various coverings used on a bed, blankets do not wear out quite as quickly as the other things. Sheets or pillow cases, which have to be frequently washed, are probably less durable than blankets. It would be very difficult, therefore, to justify leaving out blankets, and leaving pillow cases and the rest in. Once you start, you are in a field where distinctions are difficult. Another reason why my right hon. Friend does not feel able to accept this Amendment is that there is a good deal of money involved, estimated at something like £500,000. We have already given away quite a lot on the Schedules during the Committee stage, and my right hon. Friend does not think that he can afford


this further loss now. I hope the hon. Member will not press this Amendment.

Amendment, by leave, withdrawn.

Mr. Deputy-Speaker (Sir Dennis Herbert): Before calling the next Amendment, in the name of the Chancellor of the Exchequer, I must refer to a point of procedure in connection with the Amendment. The right hon. Gentleman has put it down in the form of leaving certain words out of column 2 and inserting other words in their place. This Amendment, although put on the Paper as one, necessarily has to be put in two parts. Hon. Members who were in the Chamber during the Committee stage will realise the difficulty which there is in dealing with a Schedule with columns of this kind, where one has to deal with the text line by line, instead of dealing with one column before the next. Therefore, in cases where it is proposed, as in subsequent Amendments, to leave certain items out of column 2 and then to put them into column 3, and so to exempt them, the first Amendment, taken by itself, would have the effect of increasing the tax, and, therefore, would not be in Order on Report. It must be understood, therefore, that in all those cases the two Amendments are taken together. The first can be dealt with only on the understanding that the hon. Member or right hon. Member in charge of the Amendment intends to move and the House intends to pass, at a later stage, the subsequent Amendment, to put the words into the other column.

6.4 p.m.

Sir K. Wood: I beg to move, in page 41, line 39, column 2, to leave out "earthenware or semi-porcelain of table or kitchen use," and to insert:
china, porcelain, earthenware, stoneware or other pottery ware, of a kind used in the preparation or serving of food or drink.
You have my assurance, Mr. Deputy-Speaker, that it is my intention to follow the course you have indicated. This Amendment is to give effect to an undertaking which I gave on the Committee stage, arising out of the representations made to me by my hon. Friends that, as cheap table and household china was competitive with similar earthenware, it should be treated on the same basis. My hon. Friend the Member for Stone (Sir J. Lamb) was one of the most vigorous advocates of that, and a deputation from

the trade with great force also stressed the point. I am meeting that contention, and putting both kinds of goods on the same basis, as will be evident if this Amendment and a subsequent Amendment are considered together. The only other point is that I propose to insert, in place of the words
for table or kitchen use,
the words,
of a kind used in the preparation or serving of food or drink.
That is being done after discussion with the trade.
I observe that there are Amendments on the Paper asking for complete exemption of these articles. The hon. Members responsible for those Amendments have done their duty in putting them down, but, at any rate, I have done mine in bringing forward this Amendment.

6.6 p.m.

Mr. Ellis Smith: We are in a difficulty owing to the procedure in regard to this Amendment. I am not complaining about that, but it is necessary that we should state our case on behalf of the people whom we represent. Although we appreciate the action of the Chancellor in putting down this Amendment, it is still not satisfactory, and the observations just made by the Chancellor indicate that the attention to which this matter is entitled has not been given to it. We do not expect complete exemption for the whole of the products, but we thought we had a reasonable case for asking that products within the narrow limits of what was suggested, for table use, should be exempted. In the first place, let me express, on behalf of myself and those with whom I am associated, our appreciation of the Chancellor's action in putting this Amendment down. I hope that he is prepared, even at this late hour, to reconsider the matter, and that he will take into consideration the very limited proposal that we have made. We ask for action to be taken to prevent irreparable damage being done to the pottery industry. When a market is lost, it takes some regaining. Since the Committee stage I and several of my hon. Friends, particularly the hon. Member for Burslem (Mr. MacLaren) and the right hon. Member for Newcastle-under-Lyme (Mr. Wedgwood) have had letters urging the importance of exemption for articles of the kind suggested. I will read an extract from a letter, in order that the


Chancellor, and the House in general, may appreciate the importance of the matter:
We have been hoping to extend very considerably the sales of our ware in the United States of America and throughout South America. A pursuance of this policy will not, however, be possible if we are unable to make deliveries to the home market. A reduction of the amount which we manufacture for the home market, with a consequent reduction in our general output, will obviously affect very seriously the cost price of the goods which we manufacture for export. We are advised"—
I hope the Chancellor will take special note of this—
by our New York office that any increase in our prices will have a very serious effect on our sales in that country, and, from information to hand, we also believe that the chances of developing the South American market will be reduced to a minimum if it is necessary for us to increase our prices further.
The President of the Board of Trade, the Secretary for Overseas Trade, and other Ministers during the past week or two—and, indeed, it was referred to on the wireless last night—have stressed the importance of maintaining, and, where possible, increasing, our export trade. We appeal to the Chancellor, even now, to reconsider his decision. Anyone familiar with the pottery industry is aware of the very severe foreign competition that it has had to contend with, during the past 10 years in particular. I shall never forget my hon. and gallant Friend the Member for King's Norton (Captain Cartland), who used to stand over there, coming to Staffordshire, and visiting a factory at Stoke. When he came back to this House that hon. and gallant Gentleman could not get to me fast enough to express his admiration for the workers there and the products that they were making, but he expressed his indignation at other matters, about which I shall not speak now. That hon. and gallant Gentleman was proved right on almost every occasion on which he spoke, even when others were stabbing him in the back. If he were here to-night that hon. Member, as a result of his experience on that occasion, would be supporting us on this matter.
I understand that this tax will not affect imported goods, but only those that are to be used at home. Suppose merchants import a large quantity of goods. I understand that only those for

home use will be subject to the tax. Will those merchants be able to import large supplies, make a little alteration, and then export them from Britain? I hope that that will be watched, because in the pottery trade and in the textile trade we have had experience of that kind of thing. It is important that something should be done to prevent certain groups of people from exploiting the community in that way, I hope that the Chancellor will reconsider the Amendment, and arrange that pottery manufactured for table use shall be exempt from the tax altogether.

6.14 p.m.

Mr. MacLaren: I did not take part in the previous discussion on this matter, because I had reason to believe that there would be liberal allowances. I heard the right hon. Gentleman saying just now that the hon. Member for Stone (Sir J. Lamb) visited him with a very powerful and influential deputation.

Sir J. Lamb: No, he did not say that.

Mr. MacLaren: Then I will not proceed with that parenthesis. I will just say that I am not committed to anything which may have transpired between the Chancellor and any deputation. The Chancellor knows that I believe in taxing nothing that mankind produces and that mankind wants. Therefore, my views on taxing china are on a par with my views on taxing women's knitting frames, and on taxing men for wearing trousers when going to work. I think the Chancellor might have pushed earthenware into the third column had it not been for a suspicion that he has that china and porcelain are rather expensive commodities. Poets and dreamers have always used porcelain as a sort of simile. We remember how in his "Queen Mary," Tennyson writes of
That fine porcelain Courtney
Save that he fears he might be cracked in using,
and Byron, who exclaimed:
Thrice fortunate!
Who of that fragile mould
The precious porcelain human clay
'Break with the first fall.'
It is a delicate production, of which the Potteries, and more especially the English Potteries, are justly proud, and it is a production which I would beg


of the Chancellor of the Exchequer to consider from this point of view. It is perhaps one of the most widely known industries. It has a worldwide reputation, and it is not too much to say that the pottery industry in the Potteries has now come almost on to an equal plane of development with the highest production of the Ming period. It is an industry of which this country should be particularly proud. It is therefore unique in the markets of the world and in the field of British industry itself. It is an industry which is not altogether industrialised in the sense that there is still in the industry a large element of the personal, artistic touch which brings out rare qualities among the people that I have the honour to represent in this House. The products of this industry have such a reputation abroad that even to-day in America people will pay enormous sums, and even higher tariffs, in order to place on their table or in the china-cupboard some specimen of English manufacture. I would beg of the Chancellor to view the industry from this point of view. It is one of those industries which carries the reputation of a great tradition far afield into almost every country. It has been argued with some force that this industry, in order to carry on a successful export trade, must have a very successful internal market within the country itself. That is the plea that is put before the House now.
Why should we spend enormous sums of money upon the so-called Ministry of Information in order to carry propaganda abroad when one of the finest pieces of propaganda, in terms of industry and production in this country, is our English china porcelain and earthenware? Why should we impair it in any way by putting a tax on and injuring its internal trade at the expense of external trade? I see the words "china and earthenware" together in the Amendment. I never look at the Chancellor of the Exchequer without thinking what is given as a definition of what porcelain really is. It says that porcelain is
a fusible earthy mixture along with an infusible, which when combined are susceptible of becoming semi-petrified and translucent.
It is also defined again as
a fine kind of earthenware having a translucent body and a transparent glaze.

May I beg the Chancellor not to injure this excellent product by the weapon of taxation? But perhaps my pleading is all in vain! If I were capable of supporting my plea with the language of Shakespeare and the wisdom of the gods, it would not, I am afraid, dispose the Chancellor to remove this tax under present circumstances. But for the future I would ask the Chancellor, when he is looking for a source of revenue, to look directly somewhere else and look askance at this industry. It is one of the few rare things in industry that carries our English tradition marked in the highest artistic form which other countries are proud to receive and which we are specially equipped to produce. It is propaganda embodied in rare form which should be encouraged rather than burdened by taxation.

6.21 p.m.

Sir J. Lamb: I do not want to impinge in any way upon what has been said by hon. Members opposite in asking for more, but it would be rather ungracious not to thank the Chancellor of the Exchequer for fulfilling a pledge on suggestions that I made previously on this matter. Oliver Twist asked for more, and, while I cannot keep on asking for more, I appreciate that the Chancellor of the Exchequer has embodied in the Amendment which he has put forward the "half-way house" I offered him on the previous occasion. I would like to add a word or two to what has been so eloquently said by speakers opposite about the industry itself. It is one of which the country as a whole needs to be very proud indeed. Anybody who, in better times, has had the privilege of going to the British Industries Fair and has seen the display of pottery there, must have felt a very great sense of admiration for an industry which could make an exhibition of that description. It has been admitted by foreigners from all countries, and by people from the Dominions, that from the fine-art point of view, it was an exhibition unequalled by any other industry.

6.23 p.m.

Sir K. Wood: I entirely agree with what has been said about the value of this industry and the admiration for what it has achieved. Such great strides have been made and so excellent are their goods, that I hope this small Purchase Tax will not unduly hamper the industry. With regard to the question put by my


hon. Friends opposite as to the exports drawback. As I understand the position, the drawback is only paid where the tax has been paid. In these circumstances it is not clear that the device which my hon. Friend mentions would be profitable to the importers. I will look carefully into that matter and if necessary let him have further observations upon it. I feel that I have done all that I can to meet my hon. Friends as much as possible. I have gone half-way, and I expect them to come half-way to meet me. I hope that, having achieved something, they will not think it necessary to press me further.

Amendment agreed to.

Mr. Deputy-Speaker: I have a manuscript Amendment in the name of the hon. Member for Stoke (Mr. E. Smith), and that is the next I propose to call. It is in page 41, line 42, column 1, after "second," to insert "or third." Taken by itself it would appear nonsensical, but it is obviously introductory to the Amendment following in the names of the right hon. Gentleman the Chancellor of the Exchequer and the hon. Member for Stoke. If that latter Amendment were to be carried this one would be necessary. As we could not then go back to make this Amendment, the Amendment I now call the hon. Member to move must be regarded as introductory to the next one, which must be discussed with it. Therefore the latter Amendment can only be put for the purpose of decision and not for debate, the Debate being on this one.

6.25 p.m.

Mr. E. Smith: I beg to move, in page 41, line 42, column 1, after "second," to insert "or third."
I thank you for that advice, Mr. Deputy-Speaker. The object of the Amendment is to put sanitary ware into the same position as all other building materials. We believe that a mistake was made by the insertion of sanitary ware, and although I am not complaining of that mistake, I am desirous of rectifying it while there is time. It is well known that sanitary ware is a product for the building industry, and for sales purposes throughout the commercial world, it is looked upon as building material. Therefore, it would have been undesirable and unfair that one section of the products

required by the building industry should have been taxed, while all other products were left free from tax. Most of this sanitary ware is manufactured in the area which we represent, and alongside the manufacture of the sanitary ware is the manufacture of products such as glazed tiles, roof tiles and drain pipes, which are all necessary for the building industry. The industry say—and the operatives for whom I speak are of the same opinion—that it is not right or desirable, if the products I, have mentioned should not be taxed, that sanitary ware should be taxed. The industry felt that it was unfair to pick out a wash basin, sink or some other sanitary ware and leave the products that I have already mentioned out of account. Therefore, I think the House and the industry generally will agree that it is reasonable that an Amendment of this character should be moved, and I desire to express on behalf of the industry and the operatives our appreciation of the fact that the Chancellor of the Exchequer is prepared to accept it.

Sir J. Lamb: I beg to second the Amendment.
In no case can these be considered as luxury articles, but they are necessaries of the building trade. It is almost foolish that tiles, drain pipes and all the other accessories of a sink should be free of tax while the sink itself should be taxed.

Sir K. Wood: I accept the Amendment.

Amendment agreed to.

Further Amendments made:

In page 41, line 44, column 2, leave out "sanitary ware" and insert "and third columns."

In line 46, column 2, leave out "table or kitchen use," and insert:
a kind used in the preparation or serving of food and drink.

In page 42, line 45, column 1, leave out "second" and insert "third."—[Sir K. Wood.]

6.31 p.m.

Sir K. Wood: I beg to move, in page 44, line 11, column 3, to leave out "Medical and surgical appliances and."

Mr. Deputy-Speaker: In this case we must discuss this Amendment with the next one on the Order Paper, in page 44, line 14, column 2, to leave out "and medical and surgical appliances."

Sir K. Wood: The purpose of these Amendments is to carry out an undertaking which I gave to the House, and they are designed to exempt from tax a number of surgical and medical appliances such as not only those originally contemplated in the third column, i.e., artificial limbs and spinal jackets but also surgical boots, crutches, trusses, aids to the deaf and other medical and surgical appliances which might have been held to be liable to tax. The House will remember that medical and surgical instruments used by dentists are not taxed, and by this Amendment medical appliances including operating tables, surgical bandages and other similar goods made up for surgical use will also not be taxed. The effect of these Amendments will be to exclude all such things.

Mr. Barnes: May I ask the Chancellor whether a boot specially made for correcting physical deformity would be classified as a surgical boot?

Sir K. Wood: Such a boot, if made by a manufacturer, would be exempt.

Amendment agreed to.

Further Amendment made: In page 44, line 14, column 3, leave out "being appliances or drugs."—[Sir K. Wood.]

Sir K, Wood: I beg to move, in page 44, line 27, column 2, to leave out:
Account books and plain books (whether ruled or not)
and to insert those words in column 3.
This follows an undertaking I gave the other evening in relation to books, newspapers, periodicals, etc., and leaves out of column 2 books and plain books whether ruled or not.

Mr. Barnes: I must apologise for putting this point, but it is very important. I want to know whether loose-leaf transfers, which ultimately become account books and are purchased loose in quantities, and counter check books and invoice books come under the definition of account books, whether plain or ruled, or under the definition of note-paper or other stationery?

Sir K. Wood: I will inquire and let my hon. Friend know.

Amendment agreed to.

Further Amendment made: In page 44, column 3, leave out lines 37 to 41.—[Sir K. Wood.]

6.37 p.m.

Sir J. Lamb: I beg to move, in page 45, line 6, column 3, after "tramcars," to insert "trolley vehicles."

Mr. Deputy-Speaker: This is another case where, I think, this Amendment and the next Amendment, in page 45, line 6, column 3, to leave out "omnibuses and char-a-bancs," and insert:
and public service vehicles as defined in the Road Traffic Act, 1930,
might be taken as one.

Sir J. Lamb: I was told that trolley vehicles were in the definition of tram-cars, but there is some doubt in the industry as to whether that is so, and I put this Amendment down so that there will be an opportunity of making it clear in the Bill.

6.38 p.m.

Mr. E. Smith: I beg to second the Amendment.
I do so for the reason that over a long period it has been the policy of municipalities and local authorities in general to convert their tramcars and trolley buses whenever they possibly could. In areas where they have no underground system of the kind in London, more and more enlightened municipalities are embarking upon conversion of this character. In addition to that we find an increasing difficulty is the importation of petrol and oil for diesel engines, and it has been found in many areas that trolley vehicles running upon home-mined coal is preferable to vehicles whose motive power is derived from imported oil. Progressively-minded organisations have pressed upon municipalities and Government Departments—and deputations have waited upon the Central Electricity Board and others—the need for the encouragement of this conversion policy. It would be a calamity if this tax was placed upon trolley vehicles and others were to be exempt as the Bill now stands.

6.40 p.m.

Captain Crookshank: Last time we discussed this matter my hon. Friend wanted the words "trolley vehicles" inserted after "omnibuses," but this time he wants the words inserted after "tram-cars." It would have exactly the same effect wherever you put the words. I have already explained, on the Committee stage, that it was not the intention that trolley vehicles should be treated


differently from tramcars and omnibuses, and I gave the assurance that the word "omnibuses" does in fact cover trolley vehicles. It is unusual in legislation to say the same thing twice over, but if my hon. Friend is particularly anxious that trolley vehicles as such should appear in the Schedule there would be no harm in putting in the words because they add absolutely nothing to what is already there. However, if he would like it I will accept it.

Sir J. Lamb: I would like to thank my right hon. and gallant Friend for accepting nothing which I appreciate as such.

Amendment agreed to.

6.42 p.m.

Sir J. Lamb: I beg to move, in page 45, line 6, column 3, to leave out "omnibuses and char-a-bancs," and to insert:
and public service vehicles as denned in the Road Traffic Act, 1030.
Again, this is a question of clarification. The words of the Bill say "omnibuses and char-a-bancs," but there are other words in the 1930 Act which define what is meant by public service vehicles, and I think it would be better if the words of my Amendment were inserted to make quite clear what it is intended should be brought in.

Mr. E. Smith: I beg to second the Amendment.

6.43 p.m.

Captain Crookshank: I am not very clear as to what exactly is the object of this Amendment, but I understand it was put down in order to ascertain exactly what is meant by a sentence in the third column. I should have thought that it means exactly what it says, "tramcars, omnibuses, trolley vehicles and char-a-bancs." That seems to be simple. If you take them out and say "public service vehicles as defined under the 1930 Act" it does not seem to be equally clear. Among other reasons people will have to find out what it was that was in that Act. Whether it is intended to deal with these vehicles from the point of view of their use instead of the actual vehicles themselves, it is quite unacceptable, because all through the Bill we have made the definitions quite clear. I do not think my hon. Friend need have any fears about this, but if he suspects the

words "tramcars, omnibuses, trolley vehicles and char-a-bancs," are not perfectly clear, there will be an opportunity for discussing the matter with the trades concerned and we have power to make a definition and bring it before the House under Clause 19.

Sir J. Lamb: In view of what has been said I beg to ask leave to withdraw the Amendment.

Amendment, by leave, withdrawn.

6.45 p.m.

Sir J. Lamb: I beg to move, in page 45, line 9, column 3, after "Ambulances," to insert:
vehicles used for or in connection with the extinction of fires or the protection of life or property in case of fire.
The Chancellor of the Exchequer has an Amendment to leave out fire-engines. I take it that means that fire-engines will be exempt. A fire-engine is used for a specific purpose, but it is not the whole of the equipment used by a fire squad. There are other vehicles for the carrying of hose, and others which are quite as essential in the full equipment of a fire-fighting brigade, and we think those should be exempt at the same time. A fire-engine by itself without the others would be of very little use in comparison with the services supplied by the whole equipment.

Mr. E. Smith: I beg to second the Amendment.

6.46 p.m.

Captain Crookshank: I am sorry for my hon. Friend because he has again moved an Amendment which we are unable to accept. I think I have explained why my right hon. Friend is going to remove the words "fire-engines." It is because they got in there by mistake. The class of vehicles with which We are concerned, which are charged at the basic rate, are vehicles solely or mainly for the carriage of passengers, and therefore it is obvious that fire-engines should not be there because, of all the purposes which they serve, the carriage of passengers is the least important. Fire-engines therefore are out of the picture. It follows from that that they are out of the picture whether complete, or whether used with trailers, or whether they are engines to deal with fires. The normal case is outside the Schedule altogether. I think that


is what my hon. Friend wants. But of course the words of his Amendment would open the door to wholesale evasion, because a vehicle used in connection with the extinction of fires might imply an enormous number of different kinds of, say, private cars used by the higher staff of the fire brigade who have to go and see fires. That might be a vehicle used in connection with the extinction of fires. A great number of private cars might be adapted for trailers. We have seen a great number of London taxicabs driving about with firemen in them and with hose attached. It would be easy under the Amendment to make a very big hole in this provision. The words "fire-engines" are to be omitted, and that is really what my hon. Friend intends. I hope he will not be too disappointed.

Sir J. Lamb: You will very likely have big fires if you have fire engines and no firemen. They must be got there and they must have a vehicle of some description to get them there, and I do not see why that vehicle should be taxed. I will withdraw the Amendment but I am very disappointed.

Amendment, by leave, withdrawn.

Amendment made: In page 45, line 10, column 3, leave out "fire-engines."—[Sir K. Wood.]

Sir J. Lamb: I beg to move, in page 45, line 13, column 3, after "perambulators" to insert:
and spare parts required for replacement in the re-pair of any vehicle of the class specified in this column
If these vehicles become unusable because of some particular part which is not available, it appears that they will have to pay tax on the repair of an article which is, as an article, exempt.

Captain Crookshank: My hon. Friend is really very unlucky to-day. We have not been able to give him very much. This Amendment is quite unnecessary. What he wants is already in the Schedule, because parts are not taxable.

Amendment, by leave, withdrawn.

Motion made, and Question proposed, "That the Bill be now read the Third time."

6.52 p.m.

Lieut.-Colonel Moore-Brabazon: This moment must be a very

happy one in the mind of the Chancellor it of the Exchequer, the Financial Secretary and the Solicitor-General. It means h that their vast labour is over. It really does not matter what is said on the Third Reading. They can sit there and smile because their long and arduous task is finished. But it would be unfair to let the moment go by without congratulating the Chancellor on the way he has conducted the whole Parliamentary procedure, a He is a superb politician. He knows the House of Commons inside out and how to deal with it. In fact, he knows it so well that I suspect he deliberately put some things into his Finance Bill which he intended to give away right from the very beginning. I should like also to pay a tribute to the Financial Secretary. If I were a Minister, I cannot imagine anyone that I should like better as a second string than my right hon. and gallant Friend. It is rather disappointing to some of us to see him sitting on the Front Bench without a top hat rather than over there, when he used to give us such enjoyment, but it only shows how successful it is to take a poacher and make him a gamekeeper. No one can perform his duty better.
Budgets in war time are a great deal easier to get through the House than in peace time. The papers tell us that everyone is very disappointed at not having been taxed more. I do not take that view myself, and it is a very curious one to see expressed in the Press, but I think it is based on this thought, that it really does not matter what occurs to your own private fortune when other people are giving their lives. I think that is the reason why no one really minds what happens to his own welfare. In spite of all the praise that I give to the Chancellor, I think there is a sort of vague general feeling that the Finance Bill does not entirely fill the bill. There seems to me a lack of grasp and imagination of the difficulties. I feel inclined to quote:
The old order changeth, yielding place to new,
and to continue with the lines a little less known:
And God fulfils himself in many ways
Lest one good custom should corrupt the world.
We are in a new world in conditions which we have never met before, and yet the imagination of the Treasury has not gone


with the time. All that they are doing is to strain and stretch the old Gladstonian idea of finance, which really has not moved in thought for many years. Of course, our generation never knew the horror which was caused to the country by the imposition of the first sixpence of Income Tax. That has been flogged to death now. It is not a question of how much we pay but of how much is left in the pound. In the case of great incomes, only 3s. is left out of a pound. The theory vulgarly described as "soaking the rich," which sounds very attractive, seems even entirely to have broken down in virtue of what the Chancellor said in introducing the Budget:
If one took the whole of all incomes in excess of £2,000 a year, they would only produce in extra taxation some £70,000,000 per annum."—[OFFICIAL REPORT, 23rd July, 1940; col. 640, Vol. 363.]
That is the death knell of "soaking the rich." You have to find your money in other quarters. I do not think enough emphasis has been laid in these Debates on that definite statement. Yet we go on year after year increasing Income Tax and Surtax, knowing the whole time that that will never bring the money that is required.
I am going to take the side of a class of person whose welfare is very seldom voiced in the House, but I think it is a duty to put it before the House. That is the position of those people who have between £2,000 and £3,000 a year. Whether it is derived from investments or whether it is earned income does not matter from the point of view of what I am going to say. That class of person pays his Income Tax regularly and is one of the backbones of society. The way he conducts his life is based upon the continuity of the income that he enjoys. He has his responsibilities, his house, he pays his rates, educates his children, and maintains a certain style of life. He pays his Income Tax usually late from the point of view of receiving his income. Behind him the whole time there is the threat and the fear of Surtax having to be paid out of his slender income. Those who have any experience of sailing a boat will know that, when running before the wind, a great wave follows and looks as if it is going to break upon you and crush you, but you always just keep away from it; but something may occur,

and you are pooped and you are sunk. Very small things may occur to make that happen. It is just what the Chancellor has done this year, which will bring disaster and ruin to many of these citizens. May I say what has happened to that type of man? He has first of all had his fixed income reduced, because dividends have gone down throughout the world. He has had his Income Tax increased and, what is more, a thing which I do not think has been pressed enough upon us, is that those people who pay their Income Tax several months late are going to be penalised this year by virtue of payment at the source. In fact, they will have to pay their Income Tax very nearly twice in one year. That means that to face the demands of the Treasury is impossible for a man in the position I have described.
It is immensely unfair that a man who has done no wrong at all should by legislation and taxation be rendered bankrupt as the Chancellor of the Exchequer will render these people bankrupt if the Special Commissioners are to press their claim. It is possible to reorganise one's life, but that takes time. What I plead for most earnestly is that the Chancellor will instruct the Commissioners to deal gently and slowly with these people. If anybody with that type of income has capital, of course, he can pay the demands of the Treasury out of capital, but if he has not capital, he is entirely in the hands of the Government as to whether he is solvent or not. That is the point I want to press on the Chancellor of the Exchequer, and I ask him to deal with it sympathetically. Taxation of that type of man is really a capital tax. That, of course, is not a new thing in our legislation. A capital tax takes place by virtue of death duties, and it will take place, of course, owing to the present legislation, but I maintain that the man in that class of society who lives on an assured income, whether earned or from investments, is a very worthy member of our society and from the national point of view ought not to be extinguished. In the scientific world Newton, Cavendish, Clerk-Maxwell, and hundreds of other people have ornamented our country, and they have all sprung from that class of society.
Among people with capital there are, of course, people who derive their income from it and do nothing else. It


does not matter very much to them whether you indulge in a capital tax and reduce the Income Tax or do it the other way round, because the net result to them will be the same. But there is another class—I mean the type of man who uses his capital for adventure. That man is not to be despised. He is one who goes into adventures. I do not mean speculation on the Stock Exchange but industrial ventures, the starting of industries and getting going on new ideas. If such a man fails, he is generally termed a reckless speculator, but if he succeeds, he is praised for his far-seeing wisdom and generally arrives at the House of Lords, and later when he dies is described as an Empire-builder. But they are all the same people—people who have done their best to start industries. I have seen those people in my own life in the world of aviation. I want to speak of them because they were pioneers. They had no money in the early days, but they had great vision, and they gambled on the future of aviation. They were experimental scientists. There was no assurance that aviation would be a success. I have told the House before that when we went to the War Office offering to lend them aeroplanes they told us that they were no good for war. That was not very encouraging. The other day I happened to look in the Betting Book at White's Club, and I read this entry, dated January, 1912:
Mr. Claud Russell bets Lord Basil Blackwood an even £5 that aviation will fizzle out.
One of those men at any rate had no great vision, but that entry shows that everyone was not convinced. Those who went into the industry at that time were not putting their money on a certainty. When I meet Handley Page, Short, Fairey, Sopwith, Roe and others, millionaires as they are, I take my hat off to them and thank them. Had it not been for their vision and their work we should be in a very different state to-day. We cannot keep for ever the 100 per cent. Excess Profits Tax. It is related to war needs, of course, but the Chancellor and the Government must give an indication that initiative and invention and development in this country are to be allowed to go on after the war. If anybody thinks that it will be possible to develop industry after the war on the basis of Government factories he had

better think again. It is not going to happen. The Minister of Labour has very rightly got this 100 per cent, tax now, but if equality of sacrifice means anything, then the Income Tax must be brought to those making the money at the present time—that is, the well-paid workers in the factories—though it would be impossible, of course, to ask them to pay the rate of Income Tax which is demanded from those higher up in the income scale.
Underlying our thoughts there must always be the question how we are to keep these people employed and keep up wages. We can, of course, rely on the co-operation of the trade unions. They have their ears to the ground, and they will co-operate as much as possible. But the people who are engaged in industry need as much encouragement as possible, and we have not found that in this Bill which we are about to pass. There are two classes of rich men. To illustrate my meaning, I will quote two American' cases, because I think that is better than referring to anyone in this country. Take Mr. Ford, for example. He never took wealth from other people to himself. He made his money by creating something. Nobody was deprived of money or swindled because he bought a Ford car. Mr. Ford created wealth.

Mr. Kirkwood: Will the hon. Gentleman tell us exactly what he means by the word "create"? Is not the meaning to make something out of nothing? I do not think any human being ever did anything of the kind.

Lieut.-Colonel Moore-Brabazon: Surely, to create wealth is to put work into something and make it something that is useful instead of useless. The raw iron and the other things from which a motor car is made are useless until the whole fabric of the factory works on them and makes them into a motor car, and from that moment certain wealth has been created. I have given an example of a man who made a vast fortune, without swindling anybody, by creating wealth. There is another type of millionaire, a man like Mr. Smith, an American, who made an immense fortune out of selling short on a bear market. That is a discreditable thing to do, for it adds to the poverty of


everyone. Under our present system of society, both people have been allowed to make a fortune. My point is that I do not think the Government or the Treasury have ever really discriminated enough between those two types of people. If we are to have prosperity after the war, we must encourage the industrialist and not so much the financier. It is easy to go to the industrialist, for he is at his works or in his building; it is easy to attack him. Yet the financier wriggles about making profits here and there, and the only time at which you sting him is when he is dead—and a lot of them die too late. I hope that when the Chancellor of the Exchequer comes before us again he will tell us that the financial type of money-maker is being chased out and that encouragement is being given to the industrialist.

7.12 p.m.

Mr. Tinker: I cannot compliment the Chancellor of the Exchequer to-night. This Budget is one of the worst Budgets the House has dealt with since I became a Member. It contains certain points which the House would not have agreed to had it not been for the exceptional circumstances in which we are placed. The Tobacco Duty has been increased beyond all measure, and it hits many people very hard indeed. We have accepted that. But the worst feature of all in the Budget is the Purchase Tax. Hon. Members on these benches have had to agree to something which certainly hits our class harder than it does anybody else. We accepted the Purchase Tax because of the peculiar position in which we are placed, and I do not think that in any other circumstances we would ever have thought of doing anything of the kind. To agree to taxation of many of the commodities used chiefly by the poorer classes seems to me to be out of all reason, and I think we have made a grave mistake in accepting it, but we did so in the hope that it might be the means of smoothing over the difficulties which we are encountering. On almost every occasion when I went into the Government Lobby, against many of my hon. Friends, I did so because I accepted the principle of the Purchase Tax, and having accepted the principle, I felt that it would not be right to dodge, as it were, in the case of certain items,

when I thought that the whole thing was wrong. It seemed to me that if I were to give way on any point, it would mean that I was trying to escape my responsibilities, and I did not want to do that.
What I should like to ask the Chancellor is how far the concessions which he has made have cut into the total revenue which he expected. Perhaps he will be good enough to tell me that when he replies to the Debate. The reason I object to the principle of the Purchase Tax—although I supported it—is that I think there are other means of getting the money. It is here that I differ from the hon. and gallant Member for Wallasey (Lieut.-Colonel Moore-Brabazon). I cannot understand him when he tries to defend millionaires. I have always understood that the sole thought of the men he has spoken about, the great men of industry, ought to be— and I believe largely is—to create something for the benefit of humanity, but they do not benefit humanity if they make themselves millionaires out of the poor people. The real way to benefit humanity is to say, "I have done my duty, and I do not want to have all this vast wealth behind me." The hon. and gallant Member may argue that the wealth which these men have can be put into industry for the purpose of creating further things, but he cannot get away from the fact that they have the wealth, and if taxation is to be imposed, it must be imposed on the people who have the wealth.

7.16 p.m.

At this point in the proceedings there was an air-raid warning, and MR. SPEAKER suspended the sitting.

On resuming

7.40 p.m.

Mr. Tinker: If those who control industry are able to get a fair competence, say anywhere up to £500 a year, while the nation is in dire distress, that ought to be sufficient for their needs. The hon. and gallant Gentleman may have settled himself to a mode of life which needs £2,000 or £3,000 a year to keep up. I claim that that is wrong. I suggest that when the Chancellor sets out to draw up his financial statement at a time like this he should start from the basis of allowing people a fair standard of life and after that take all the wealth that he needs for the country's efforts.
I confess that I was disappointed with his Income Tax proposals in this year's Budget. I thought the Income Tax would have been more. I pay Income Tax and should have been prepared to pay more, knowing very well that so long as I am in a position to pay Income Tax I shall always have enough left to provide me with a decent standard of life. The man who has to pay Income Tax can always meet his liabilities and still be better off than the lower-paid sections of the community. With Super-tax, too, the Chancellor ought to go to the full length. There is an idea that he has killed the goose that lays the golden egg, but I shall have to see that it has been killed before I shall believe it. There are the Death Duties also—all these things could have been gone into deeper at a time like this. I know very well that on the Third Reading we cannot alter the Finance Bill, but we are entitled to comment upon the provisions which it contains, in the hope that when the financial situation comes before us for examination again—and that may be earlier than we think, because we shall want all the wealth this country can yield— the Chancellor of the Exchequer will not adopt the view of the hon. and gallant Gentleman who has spoken for the richer people but take the view of hon. Members on this side of the House, who I think have a better grasp of how to deal with the situation than many others who sit in this House.
It has come to my knowledge that the richer people have a way of evading Income Tax and do not meet their responsibilities in that respect as do the poorer section of the community. In making that statement I admit that I cannot bring any proof of it; I only suggest that the richer people seem to have an easier way of evading their responsibilities than do the poorer people. The lower-paid man who is subject to Income Tax meets his responsibilities with an openness of mind which I think is commendable. He has a fixed income and knows what he has to meet, and he makes provision accordingly. Richer people have vast ramifications of money invested here and there, and in some cases, with the assistant of the lawyer class to work things out for them, they are able to evade their responsibilities; and, what is worst of all, in doing that they do not regard it as a sin. It is a possibility—and I say that

it is only a possibility—that Herr Hitler may succeed in his designs, and where will the rich people be then? It will not be a question of handing over a proportion of their wealth—the whole lot will go. For that reason I hope the Chancellor, if he remains in his present office, will not pay too great regard to where the wealth is but take as much of it as he can, and not engage in so much borrowing. I realise your tolerance to-night, Mr. Speaker, in allowing me to go very wide of the mark, but I wanted to put my point of view in the hope that the Chancellor might be impressed by what I have said when he comes to prepare his next Budget and draw it up OF the lines which I have indicated.

17.42 p.m.

Rear-Admiral Beamish: The Finance Bill has now come before us for judgment, on Third Reading, after having been stripped to some extent of many of the good points which it had originally. Personally, I agree with the step-by-step policy in the matter of imposing more direct taxation, and I very wholeheartedly congratulate the hon. and gallant Member for Wallasey (Lieut.-Colonel Moore-Brabazon) on the gale of commonsense which he brought into the Debate by his remarks on the way in which fortunes are made by alert people who work so hard in the public interest. But what troubles me at the moment is that I feel that certain vested interests have been working, as they often do, against our Budgets in a manner which is opposed to the national interest and in disregard of that interest, and at times I feel almost angry that this should go on. I regret that medicines have not been put into the right column in Schedule 7, and I hope that the Chancellor will carry out his promise to look into this matter in the immediate future with a view to putting a tax upon patent and other medicines. When I recall that in August, 1914, one of the best, clearest and cleverest reports that has ever been drawn up on the subject of patent medicines was issued and that nothing was done about it, and that a further excellent report was drawn up in 1937 with similar results, I am moved to ask whether it is necessary to have two dreadful wars in order to persuade us to deal with a gravely anomalous position. Therefore, I urge the Chancellor to start straight


away to carry out the pledge which he has given.
It is all very well to say that taking patent medicines is not a vice. I do not suggest that it is a vice, but I suggest that it is an extreme form of self-indulgence. The consumption of tobacco and of alcohol need not be vices, and I do not call them vices, but their consumption is self-indulgent, and they deserve to be taxed, and so do these patent medicines and other medicines which are poured down the throats of the public. Everybody realises, and even the medical profession laughs at, the credulity of the public in its attitude towards these medicines. Some doctors, I am told, even boast of preying on that credulity. If you cannot control self-indulgence, I say that, as the Chancellor of the Exchequer, my right hon. Friend has every right to tax it. Some of the discreditable mumbo-jumbo on the outside of the bottles, worthy only of witch doctors, will, I hope, be brought to an end by means of the taxation which I hope to see. If anybody wants to realise how this taking of medicine is based upon the credulity of the public, I recommend him to read O. Henry's "The Gentle Grafter," which will make anybody who has never read it before smile and realise how true these stories are.
I turn now for a moment to the subject of the Press, a great vested interest, and to the effect it has had upon the endeavours of the Chancellor of the Exchequer to frame his Finance Bill. I notice that criticisms of the Press are always moderated, and the reason is not far to seek. There is very much good in the Press which deserves support, even though there may be a depraved and sinister streak running through it. It runs through what in this country is grand, and it is that sinister and depraved streak to which I so strongly object. It has been said that the Jewish question will never be solved because nearly everybody has a pet Hebrew and—

Mr. Speaker: I cannot see that the hon. and gallant Member's remarks have now anything to do with the Bill.

Rear-Admiral Beamish: I apologise if I am getting away from the point. I listened to and read with the greatest pos-

sible interest the speech of the Chancellor of the Exchequer when he had to withdraw the tax that he had proposed to put upon books and newspapers. No wonder he hung his head, because it was the speech of a deeply disappointed man struggling to raise the necessary money, in the national interest, for the prosecution of the war. I cannot help commenting on the spectacle of a vested interest being able to bring such pressure to bear upon a Chancellor of the Exchequer. That giant's strength has once more been used to bring great injury upon the national finances. I will not pursue this point, which I know lies outside the area of the Bill, but I wish to add that the Press can easily cut out the canker which has caused the trouble of which I speak. The Government could do the same, but neither the Press nor the Government seem to be able to dare to do so. I repeat words that were written long ago to the effect that when people asked for freedom it is:
License that they mean when they cry 'Libertie'.
It is the anonymous aspect of the thing which is most displeasing. I deplore again that books had to be handled in the same way. I do not say that all books are bad, but some are better than others. There is nothing so priceless as a good book, but a good book can bear a tax, and a bad book is better strangled by a tax than published. One has only to glance around the bookshop, secondhand or otherwise, to realise the enormous quantity of rubbish that is published. So we arrive once more at the last stage of another Finance Bill No. 2. It has come, and is very nearly gone. It will shortly be a law of the land. Day by day the costs of the war mount, and the age-long hatred—which I do not share and never did—of taxation persists; but the enemy is at the gate.

7.56 p.m.

Mr. Glenvil Hall: I congratulate the Chancellor of the Exchequer and the Financial Secretary to the Treasury on piloting their first Budget through the House. When the hon. and gallant Member for Wallasey (Lieut.-Colonel Moore-Brabazon) was speaking, my mind went back to the time, about 10 years ago, when the Chancellor of the Exchequer used to sit in the corner seat below me, and the Financial Secretary to


the Treasury used to sit in a corner seat behind me. They in those days made themselves extremely objectionable to the Labour Government then in office. If there was a weakness in any of the Measures which the Labour Government put through the House at that time, they could be relied upon to find it. Now, they have had to suffer in the same way. Although much that is in the Finance Bill is good and is approved by all sections in this House and by the great body of people outside, some of the proposals in the Bill have nearly brought the Chancellor of the Exchequer down. If he had not given way upon the Purchase Tax in respect of books and newspapers, the Government might, in my view, have suffered a defeat thereon.
I was very interested in the speech which the hon. and gallant Member for Wallasey made, especially when he told us of the entry in the Betting Book at White's, dated 1912. It crossed my mind that much of the economics which he expounded to us might be said to bear the same date. He chided the Chancellor of the Exchequer on being Gladstonian in his finance, but some of the points made by the hon. and gallant Member himself were not very progressive as we on this side of the House think of progress. The pioneers of aviation were certainly entitled to some benefit for the risk, sacrifice and ability which they put into their inventions, bur I would remind the hon. and gallant Member that their work could not have been accomplished but for others who had gone before and for the workmen who carried out in practice their ideas. The difficulty is, as my hon. Friend the Member for Stoke (Mr. E. Smith) reminds me, that nine times out of ten the inventor does not really get the benefit of his invention. To-day it is not the inventor who is making the money out of aeroplanes, but the great body of shareholders who have done no more than put their money into the companies.
I suggest to the Chancellor that when we come to the next Budget which he, or his successor, will bring before the House, he should follow out another suggestion which the hon. and gallant Member made and be a little more imaginative. I see no reason why the Chancellor should not go to other sources in order to get revenue. Some years ago I took the trouble to examine the speeches of

the late Viscount Snowden, who, as the House will know, was Chancellor of the Exchequer 10 years ago. It was very interesting to realise that he began his public career by imagining that most of the inequalities of our social life could be ironed out by the weapon of taxation. Rightly or wrongly—I do not wish to go into it—when at last the Chancellorship was in his hands and he had an opportunity to carry out his views, he obviously came to the conclusion that there was a limit to the amount of taxation which could be levied. What that limit is I do not know, but it is obvious that there is a limit to the taxation which can be imposed. Therefore, it is necessary that the Chancellor of the Exchequer should seek fresh sources from which money can be raised. I think it is a pity that the Clauses in a previous Finance Act dealing with the taxation of land values were expunged. They would have provided an excellent weapon for the Chancellor to use to-day.

Mr. Speaker: The hon. Member ought to have referred to that subject at an earlier stage of the Bill, and not on the Third Reading.

Mr. Hall: I bow to your Ruling, Mr.Speaker. I do not know whether it is in Order to suggest that a Chancellor should look to the enormous sums which are now spent on betting and greyhound racing—

Mr. Speaker: That subject cannot now be discussed either.

Mr. Hall: I apologise, Mr. Speaker, but I thought that, following earlier speeches you were perhaps allowing a little greater latitude to-night. I, of course, will not pursue that topic any further. Before I sit down, however, I would like to refer briefly to the Purchase Tax. The hon. and gallant Member for Lewes (Rear-Admiral Beamish) took the view that the Purchase Tax is good and that so far as books are concerned the Chancellor should retain books, periodicals and newspapers in Schedule 7. I think the Purchase Tax is a bad tax. It bears very heavily on the most deserving poor. It penalises those with large families, and it does not bring in as much as the consumer actually pays. It is levied on the wholesaler, and because that is so the consumer pays more than the actual


Purchase Tax which has been put on the article in question. I would remind the Chancellor that there is a great deal of feeling against the Purchase Tax, and especially a Purchase Tax levied on books and newspapers. I was very perturbed the other night when the Chancellor told the House that he would withdraw books, periodicals and newspapers from the Schedule, to hear him say that he would probably have to include them in on a future occasion. That is a threat which is hanging over the industry, and it is an undeserved threat. My view is that public opinion is such that he will never be able to implement it, and I would like the Financial Secretary to the Treasury, if he is to reply, to give us some indication, before we finally part with this Bill, that the chances of that tax being put on books and newspapers are so remote that none of us need worry.
I conclude by saying that I hope it will not be long before we get another instalment of this interim Budget, which seems to run on throughout the year, and that when we do get the next instalment the Chancellor will go to fresh sources of revenue, and in a most drastic way will take from those who reap large rewards for very little and see, in the words of the hon. and gallant Member for Wallasey, that people who are receiving excessive incomes without any creative effort on their part pay a higher share of taxation, that must be levied in order to carry the war to a successful conclusion.

8.6 p.m.

Mr. Hely-Hutchinson: My hon. Friend the Member for Leigh (Mr. Tinker) pointed to the difficulties which a rich man experiences in endeavouring to enter the Kingdom of Heaven. My hon. and gallant Friend the Member for Wallasey (Lieut.-Colonel Moore-Bra-bazon) pointed out what a tough and difficult time the rich man has while he is here below. So that between the two of them it seems that there is not much to be said for being rich. It would be intriguing to carry a little further the Debate on the merits and demerits of private enterprise, but I am afraid, Mr. Speaker, you would not let me go very far on that, and I will therefore attempt the difficult feat of making a Third Reading speech within the Rules of Order.

What my right hon. Friend the Chancellor said about the financial needs of the situation, when he was introducing the Budget, and what he has found possible to put into this Bill provide such a contrast as to make it abundantly clear that what is needed and what is politically expedient do not coincide. The contrast further shows that this is not really the Chancellor's Bill but the Cabinet's Bill. The Chancellor has put into the Bill what he has been able to persuade the Cabinet to stand for.
I agree wholeheartedly with my hon. and gallant Friend the Member for Lewes (Rear-Admiral Beamish) in his approval of the Purchase Tax, and I would like to congratulate, by the way, my hon. and gallant Friend on his very courageous speech on other matters. The Purchase Tax, as far as it goes—and it does not go very far—is a move in the right direction, both as regards reducing individual private expenditure and from the point of view of raising revenue. The real heart of the Bill, which passed practically unnoticed, is the provision which my right hon. Friend the Chancellor has inserted with regard to the collection of Schedule E Income Tax- at the source. That is the corner-stone on which the Government must build, for the effective prosecution of the war, in diverting from individuals to the State the power to spend money
The Major criticism of the Bill is to be found in the huge gap which has been suffered to lie between the deficit on the income account and the amount that is being raised by taxation. That gap is left to be covered by borrowing. I must say that the borrowing is being practically allowed, so to speak, to do itself. That feature of this Bill—which I quite appreciate is due to the Cabinet's view of what is politically expedient—makes it a gambling Bill. The Bill gambles on the help that we may hope to get from America, after our foreign resources—which are finite—have been exhausted. Is it wise, is it right, is it even politically expedient, to take such a gamble, and to take the United States for granted in that way? When will we learn to rely on ourselves alone? I have followed the Prime Minister's advice, and have looked back over my own previous speeches on the war-time Budgets. Through all of those speeches runs the same note, that it is mass economy, mass self-denial, and


mass sacrifice which will enable us to win the war; and that only a Government which dares to demand mass sacrifice will lead us to victory. My complaint about this Bill is that the Government have not dared to demand this sacrifice.

8.12 p.m.

Mr. David Adams: The general feeling of relief which we feel on reaching the Third Reading of the Finance Bill should not prevent the House recognising the very great and valuable labours of the Chancellor and his lieutenant, and the manner in which they have extended concessions, as far as they were able to do so. But for certain aspects of the Bill, it might have been possible to accept it with comparative calm, and even with some melancholy rejoicing. But, in view of those aspects, the foundation upon which the Budget is built is, in my judgment, unsound, and therefore unsafe. It should have been based on the taxation of known wealth.
The weakest feature of the Bill is undoubtedly the Purchase Tax. The hon. Member for Hastings (Mr. Hely-Hutchinson) declared that that was an excellent beginning. I take it that he would encourage the Chancellor in future to add in that direction to the burdens of those upon whom the tax undoubtedly falls. Those of us, particularly on this side, who have opposed the Purchase Tax from its inception, and from its re-inception, will watch with some mournful interest the painful effects which, I believe, will fall upon the life of the nation. I believe—and I hope that I am incorrect in my belief—that it will weaken the morale of the nation. Certainly it has impaired the spirit of good will which hitherto has prevailed among all classes. There is undoubtedly spreading, with the increased knowledge of what this tax really means, a feeling that certain classes, and particularly the workers, have received severe body blows. I believe that unless supplementary incomes can be found for the workers, it will lower the standard of life and add depression to already depressed sections of our population. If the Chancellor could have confined the tax to luxuries and semi-luxuries, the country would have rejoiced at that charge, but the tax enters the homes of the workers and places burdens upon them which are

bound to add substantially to their difficulties.
I turn to the burdens that have been imposed on the hospitals. The voluntary hospitals are struggling to maintain themselves, and are appealing with ever growing intensity for public subscriptions. We know the great services that those hospitals are rendering. The municipal hospitals, with their sanatoria and other institutions, have been continually expanding with the demand for better clinics, consultations and other services, which have been provided almost entirely at the public charge. Both classes of hospitals will suffer very severely from the Purchase Tax. It seems to me that there never was a less well-chosen time at which to impose added burdens upon these institutions. In wartime, when pre-eminent calls are being made upon both classes of hospitals, we are asking them to find large additional sums to meet this Purchase Tax. These new burdens are as unexpected as they are severe, and it is no exaggeration to say that they will bar the road to future progress in many parts of the country, and that preventive and curative medicine will go through a period of stagnation as a result. I am sure that if the Chancellor had given more consideration to the effects of this tax, it would never have been imposed. I have often wondered whether the Chancellor, before framing his Budget, conferred with his Ministerial colleagues.
One could imagine that he did not do so. We have heard of certain of the Ministries making most meticulous provision for raising the standard of life of the industrial workers. We have the great new free-milk scheme with that object in view. We have good will shown by certain Ministries to the extension of the social services, and we have the general Ministerial decision, in which the whole country rejoices, to incur heavy expenditure to prevent a rise in the cost of living in many important directions. If Ministries are doing what they can to relieve the pressure upon the industrial workers of the country, how startling and strange it is that, through the Budget and in the Purchase Tax, the pressure is to be increased in another direction to stultify, and probably even destroy, the beneficent action which has been taken by other Ministerial Departments of the Crown.
But for certain disabilities, the Budget and the Finance Bill are sound, but I believe that a more equitable basis for finding the requisite sums—and we sympathise with the Chancellor of the Exchequer and the Government in that imperial necessity—could have been found in a better way without in any way impinging upon the standard of life of the people. Inasmuch as the Bill has failed to do this, we condemn it, but we rejoice in the finding of the necessary sums without impairing industrial efficiency. The Chancellor of the Exchequer has already predicted that perhaps he himself will be Chancellor when a new and early Budget is introduced, but we warn him not to pursue the direction which he has taken in the Purchase Tax. Let that be, as far as the war is concerned, the final step in that direction, but let us advance in those directions where wealth, and wealth in abundance, is to be found.

8.23 p.m.

Sir John Wardlaw-Milne: My right hon. and gallant Friend the Financial Secretary, I have no doubt, will be relieved to know that I do not propose to speak on the Finance Bill generally, because I have had an opportunity of making my views on the Budget and the subsequent Resolutions already perfectly clear. I agree with my hon. Friend the Member for Consett (Mr. David Adams) that another Budget will be essential at a very early date, and I have no doubt that when that time comes the Chancellor of the Exchequer will have to look much wider than he has done to-day for the revenue that will be required. If I differ from my hon. Friend, it is that I do not think that he can look in any one direction. There will be a sacrifice of a very general character required in this country if we are to meet the financial situation with which we are faced—a situation which I am afraid the people of this country do not fully appreciate.
I rise really to ask my right hon. and gallant Friend whether a mistake has not-been made in connection with one comparatively small matter in this Bill. I refer to Clause 29, Sub-section (5), in which it is stated:
In this Section references to the exportation of goods from the United Kingdom include references to the shipment of goods as ships' stores.

To any ordinary person it seems perfectly clear that stores going aboard a ship are not to be subject to the tax which is referred to in the Clause, and it would be contrary to the usual custom in such cases. I am told, however, that there is a curious kink in the law. It arises out of an Act as far back as 1876, namely, the Customs Consolidation Act, which in setting out the procedure necessary to obtain an exemption from excise duties for ships' stores, refers to vessels of the burden of 40 tons and upwards departing from any port in the United Kingdom upon a voyage to ports beyond the seas. The effect of that Act, I am told, would mean if Clause 29 stands as it does now, that all vessels engaged in the coasting trade would have all their ships' stores subject to tax, whereas all others would be free of tax. I cannot believe that that is the intention of the Government. I should be very sorry to hear that it was, and I am extremely sorry that unfortunately this matter was not brought to my notice, or to the notice of other Members, early enough to have the matter put right. It is unthinkable that we should tend to make the coasting trade of this country, which is subject to very great difficulties in any case, owing partly to the road and rail competition and other reasons, subject to a tax which is not put upon shipping generally. I cannot help thinking that that is a matter which must have been omitted or that there was an oversight when the Bill was drafted. I realise that this is a very late stage at which to raise the matter, and all that I can do at this Third Reading is to ask the Financial Secretary whether he will be so good as to have the matter looked into and see whether there is not some way yet in which this difficulty can be put right. I really do not think it was intended to impose a disadvantage upon one of the most important of the smaller parts of our shipping trade by making it subject to this tax. The coasting trade is a very valuable one from many points of view, particularly of earnings and employment, but also owing to the fact that it provides a very large number of valuable people for defence in more branches than one of the Naval service. I hope that my right hon. and gallant Friend will look into the matter and see whether it can be put right in any way before the Bill finally passes.

8.29 p.m.

Mr. Price: The present Budget has not shown much imagination, although I think it was very much what we all expected. It is just another turn of the screw all round; that is what it has turned out to be. At the same time, as we are obviously to have another one before very long, it is an indication that the Government are apparently feeling their way to new and other measures which certainly will be needed. Anyone who looks at the true financial position will realise that the gap which is being formed all the time is not being filled up except by loans and other measures which will inevitably lead to inflation and a rise in prices. While it is true that Government expenditure is still going up, it is true also that the national income is going up. It is very doubtful by how much the national income has risen, or is rising, but in any case the gap is widening, and we are coming nearer to the danger of inflation. In fact, I have reason to believe that it has already begun.
The various Parts in which this Budget is divided—Parts I to VI—form the stock methods by which money is raised. The increase in Income Tax, the Excess Profits Tax, Death Duties, Estate Duties and Surtax were all very much what we expected and were something of which the House approves. But supposing we took away the income of everyone over £1,000 which is not impossible in wartime, we would still not finance the war. There are other sources of revenue which will have to be found, and I think we shall get to that point before long. Those who have read the writings of Professor Keynes will see that according to the figures he gives—which may not be completely accurate, but which I think are not far wrong—there are incomes of £5 to £10 a week which will have to take a share in direct taxation if proper contributions are to be made to prevent the inflation of commodity prices.
I think it is a good thing that the Chancellor has introduced into this Bill measures whereby Income Tax can be collected at the source from small incomes. It is an innovation which one feels will possibly lead to another step later on. I personally, would like to see the method adopted, although I cannot go into details, whereby direct taxation on these lower forms of income could be

linked up with family allowances. I think this would introduce an important measure of social reform as part and parcel of our financial system. In any case, if this taxation from the source on small incomes is to be coupled with some system of family allowance, one sees in it the swallow which may later make the summer. I would sooner see this than the much more dangerous form of the Purchase Tax.
I have not felt it my duty to go into the Lobby against this tax, as have some of my hon. Friends on this side, although I felt strongly about it and have felt I would have liked to have done so. This turn of the screw is not the most equitable way in which this tax ought to be levied. I am afraid its introduction will put fresh burdens on those below the poverty line, whereas the method I have just referred to will leave alone those below the poverty line. If this Budget is a harbinger of other things, and I think it is by the introduction of the principle of taxation of lower incomes at the source, then it is certain that the Chancellor will be taking a step in the right direction, and one which he or his successor must develop in later Budgets.

8.35 p.m.

Mr. Brooke: By this Finance Bill we are raising hundreds of millions of pounds, in order to win the war. But the sacrifice of money means nothing compared with the sacrifice of life. To-day, men and women have lost their lives, and fearless young men have given their lives in the defence of this country. I think we can from this House give the Chancellor a message. It is that he can make any demand whatever on the purses and pockets of ourselves and the people we represent, and all will willingly respond—provided everyone is satisfied that he is endeavouring to spread the burden fairly and that he and his colleagues will see that the money is spent economically.
Those whose incomes have diminished as a result of the war are severely punished by this Budget. It is, one might almost say, a vindictive Budget so far as most Londoners are concerned, because London has been, economically, hard hit by the war. Other parts of the country are prosperous. I must not say that any part is doing well out of the war, because money does not count for every-


thing. But money is flowing more freely in some cases, and I maintain that this Budget does not make sufficiently great demands on those whose incomes are enhanced by war. This movement of income becomes very important in times of unusual change like these; it becomes an actual criterion of taxable capacity. The fact that a man's capacity to pay depends so greatly on whether his income has moved swiftly up or down is, so far as I can see, hardly reckoned with in the framing of this Budget and Finance Bill.
Since the Budget was introduced the Government have announced with universal approval that the pay of the men in the Fighting Services is to be increased. What a chance was missed there! Would not this country and House have accepted gladly, cheerfully and joyfully any new tax which the Chancellor had proposed, had he made it known that he was demanding the money in order that it might go towards making our fighting men better off? I know well that this earmarking is contrary to orthodox and honoured traditions of public finance, but if we are to carry this country through to its goal in the war we must reconsider such traditions. I hope the Chancellor, though he may think me heretical, will not be angry with me for asking that he shall not exclude anything of that sort from his mind in future Budgets.
And now we send the Chancellor forth with the good wishes of this House, to range through the country seeking the £2,000,000,000 of savings that he needs to cover his deficit. My personal view is that he has under-estimated the yield of some of the taxes we are imposing here, and that, when the time comes, he will be able to report to us that the revenue is buoyant. Well and good. But he may, too, have under-estimated some of the elements of expenditure, and I cannot help thinking that he will find that the deficit may grow much larger than £2,000,000,000 unless between now and then he consults urgently with his colleagues about means of reducing the number—a far greater number than most Members realise—of Government contracts which are now running on what is, in fact, though may be not on paper, a cost-plus-profit basis with no real control over inflation of costs.

8.41 p.m.

Mr. Pet hick-Lawrence: We have come to the point of parting with our guest—not, I am glad to say, the Chancellor of the Exchequer; he is always welcome in the House—but with the guest that he has introduced to us, his Budget, which is now passing its final stage. We have come to the point of saying "Goodbye." I do not know whether it is like a personal "Goodbye"—very often kiss and "Goodbye." In that case I am not sure that the Finance Bill is so dear to us that we should impress a kiss upon it. At any rate, we are parting with it, and I am afraid it has been rather an unloved guest, as all Budgets which impose considerable taxation necessarily are. It is not that it has stayed too long, but it was never very welcome when it came, and I do not know that it will be welcome to the country now that it has gone. Two things have been said about the Budget as a whole. It is said that the Chancellor of the Exchequer has been unimaginative, and has only imposed taxation of the ordinary kind, whereas he ought to have gone out into the realms of imagination and produced entirely new taxes of a kind unknown before. That may or may not be so, but I honestly think that the people who say that seem to imagine that' by departing from the ordinary methods of taxation they can somehow, like a conjuror, produce money from the air. Whatever forms of taxation the Chancellor adopts, he can get the money only from the people of the country, and, whatever form it takes, it still has to come out of the pockets of the country, and it will still be disagreeable to get it out of those pockets.
Therefore, I do not share the view sometimes expressed that, if only he had adopted some more imaginative new course, the yield of taxation would have been far greater and people would have minded it far less. When you take money out of a man's pocket, it cuts him down in what he has to spend, and it destroys his sense of freedom from money worries. On the other hand, I think there is a good deal of misunderstanding as to how war can be financed. I have always taken the view that it is really the economic questions which come first, and, once that is settled, the financial side of it will sink into its place. I hope before the next Budget is introduced,


whenever that may be, the Government as a whole, and the Chancellor of the Exchequer in particular, will look into the whole economic question and see how it can best be planned, because what we are faced with at present is that half the productive capacity of the country has to be devoted to the war, and the corollary of that is that only half the economic productivity of the country can go to the ordinary life of the community, and it may well be that, if the war continues, even more than half the total productivity of the country will go into the war and even less than a half is left over. That will have to apply to the people as a whole, and nothing that we can do can escape from that hard and true fact.
There are two things that arise from that. The first is that we must by all means in our power avoid the fallacy that by financial means we can escape from that economic fact. If we adopt that course, economics will come and hit us in the back by means of inflation. Owing to monetary causes the price of things will rise, just as they did in the last war. We had a practical illustration of it within the memory of most Members present, and that is a most disastrous thing which affects the poorest section of the people most and affects everybody in inverse proportion to their wealth. That is why it is essential in one form or another to try to find the money for the war out of our own resources, by taxation rather than by continual borrowing. It is only new savings which can help to avoid inflation. We have a curious system of paying taxes in this country. The natural, normal thing would be so to arrange the payment of taxes as to spread it more or less evenly over the whole year. We do not do that. Certain taxes are paid throughout the year but others are collected nearly all in the first three months. The critical time is the months in front of us. In those months the Chancellor gets a comparatively small amount of his revenue.
With regard to that, I want to make a suggestion to the Chancellor which I think is of some importance. In the case of nearly all Surtax and a considerable part of the Income Tax the notices which are sent out state that the tax is payable on 1st January. Most people take it that they are not expected to pay until 1st January and do not pay

until then, and some do not pay until 1st February or even 1st March. I think it would be of very great value if a certain amount of that Surtax and Income Tax were collected, not in January and February, but in October, November and December. The actual assessments, I believe, are sent out two or three months before the end of the year, and if people could be induced to pay their taxes just a little earlier than usual, it would be a great advantage. The Chancellor did say something about that not very long ago. He suggested that people would be making in effect an interest-free loan if they paid their taxes in advance. I suggest that there should be attached to the assessment form a small printed slip urging people to take that course. Quite clearly, people must save up to pay these taxes. If a man did not save up, he really could not meet the demand in January. Therefore in many cases he will have accumulated between now and 1st January a balance at the bank to pay Surtax or Income Tax when it becomes due. If the Chancellor put a slip on the assessment form as I suggest, asking for payment before January, he might easily get quite a considerable amount of money.

Mr. Woodburn: Would the right hon. Gentleman think it right that those who make an anticipated payment of Income Tax in that way should be given a pro rata discount equivalent to interest on War Loan while those who pay later might be charged interest?

Mr. Pethick-Lawrence: If these were ordinary times, I would suggest a discount, but I think that in these days an appeal should be made to patriotism. I have already advocated that taxpayers who are in arrears should be called upon to pay interest on the amount of the arrears, but I do not know whether it is possible to do that immediately, because probably it would require a Clause in the Finance Bill. I do not think that a man should be given a discount for doing something which is patriotic. If he has the money ready at the bank, he can quite easily pay it. Even if he could not pay in full, he might pay an instalment which I believe is possible now. A man liable for £500 or £600 Surtax might pay £200 or £300. It would help to avoid inflation, which is otherwise likely to take place.
Finally, I want to deal with two innovations in this Bill. The first is one that has received universal approval—that is, collection of Income Tax by employers from their employés. I believe that is generally approved, and that it will be of general advantage both to the community and to the revenue. I await with interest a statement which the Chancellor may or may not be able to make to-day on the particular point that I have raised as to whether there could not be in each bank a branch where this money could be received and dealt with.
The Major innovation, of course, is the Purchase Tax. That tax has been accepted, not only without enthusiasm, but with considerable misgiving by this House. That misgiving is not confined to the Labour benches in this House, nor is it confined to this House. People with such different points of view as members of the British Federation of Industry and hon. Members who sit on these benches, each from their own point of view, have doubts and misgivings, and you have such newspapers as the "Economist," the "Daily Herald" and the "Times" expressing fears about the tax. The Federation of British Industries have raised the question of its effect upon the export trade, and a large number of manufacturers, wholesalers and retailers are concerned about the machinery for the collection of the tax. If these had been ordinary times, such considerations would have meant vigorous opposition, which would probably have killed the proposals. In fact, in its original form the proposal was so objectionable that, war or no war, we could not accept it.
But we all have to take into account the fact that there is a war and that money has to be found, and what weighed with me in deciding myself and in asking my hon. Friends to forgo opposition to this tax was the fear of inflation. I have felt from the beginning that every penny put into the coffers of the State by taxation was a penny holding back the risk of inflation. Hon. Members on these benches have quite rightly said that the poorest classes of all cannot bear even a small rise in the cost of living, and that is true, but inflation might easily mean a rise, not of 3 or 4 or 5 per cent., but of 25, 50, 100 or even 200 per cent., as was the case in the last war. I am

not now talking theories, but I am talking of what we saw in the last war, brought about by the failure of the Government of that day to understand finance and to tax us sufficiently to meet the cost of the war in an economic way. I confess that the fear of inflation has shown me that it is necessary to endeavour to stop consumption and to raise as much money as possible. Therefore, in spite of all my misgivings, I decided that it was not right for us to oppose the tax in the amended form on which the Chancellor finally decided, largely, I think, in consideration of the case put forward by me and others.
But we do not know how this tax will work. It is a new experiment in this country. I hope that the Chancellor, now that he has got rid of this Finance Bill, will not say, "That is all right, and next year I can put the tax up again." He has to watch how the tax works. Does it send up the cost of living by only 2 or 3 per cent., as he thinks it will, or by far more? Does it press upon the poorest section of the people? Does it injure the export trade? Does the machinery work as well as he and his advisers expected? I do not say that it will not do so. All I say is that it is the business of the Chancellor to watch it, and not simply think that he has two workable horses which he can drive to any extent, the Income Tax and the Purchase Tax; and that when he wants more money he has simply to turn the screw on each tax, with the knowledge that nobody will like it but that everybody will have to put up with it. I think there is a danger if that should be the right hon. Gentleman's mentality towards this Finance Bill.
The Chancellor has certainly been conciliatory over the Purchase Tax. He has done his best to meet us, and we thank him for that; but we beg him to take the largest view that he can of the whole economic position, and to spare no effort to induce people of all classes to contribute out of their savings to the loans. Unless people double their present offerings, great as those offerings are, we are heading for inflation—inflation which will have all the evils which every one of us dislikes. I beg the Chancellor to consider again the points I have put to him with regard to keeping down the rates of interest, and so on. If he does that, and


if he faces the whole economic issue, then when he introduces a new Budget, I hope it will be one that will command the general approval of the House, and if we are not then on the way to the end of the war—although I am afraid we must not yet talk of an end—we may at any rate hope to meet it without a future made unnecessarily gloomy by the same financial mistakes as were made in the Great War, 1914–1918.

9.5 p.m.

The Chancellor of the Exchequer (Sir Kingsley Wood): There is at any rate one thing on which I can agree with the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence) concerning the position of the Chancellor, and it is that, although the last House of Commons stage of the Finance Bill has been reached, I can expect no period of rest. Whenever I have examined the position of Chancellor of the Exchequer—not that I ever thought I might occupy it—I have never looked upon it as being a bed of roses. There is not much bed about it and very few roses. Therefore, I take to heart all that the right hon. Gentleman has said to me to the effect that, although this stage of the financial proposals is at an end, obviously, in the conditions that face us; at the present time, the task must be continued with all the help and advice that can be given.
I wish to thank the right hon. Gentleman for all that he has done to assist me in connection with this Bill, although he has been the instrument of obtaining very many concessions from me. He and I have endeavoured to meet the present situation in the light of the Government as it exists to-day; I hope he feels that I have endeavoured to meet him, as he, for his part, can be assured that he has placed before me, with the greatest vigour and determination, the views of himself and his hon. Friends. I have endeavoured to respond, knowing as I did that in very many respects many parts of the proposals of the Bill were disagreeable and often obnoxious to the party opposite. I hope that in the result we may have come to a reasonable arrangement. As the right hon. Gentleman says, we must judge from the experience of the next year or two whether certain objections that have been taken are justified or not. I am also gratified by the remarks that have been made con-

cerning the assistance given to me by my right hon. and gallant Friend the Financial Secretary. He has helped many Chancellors of the Exchequer in times of a good deal of difficulty. I have been greatly assisted, too, by the Solicitor-General, who has helped me greatly in the passage of the Bill.
It has been very interesting to me to note the criticisms that have been made of the Budget. I was warned when I entered this office that I must expect much criticism and very little praise. Criticisms have been voiced to-night. Some of my hon. Friends have described the Budget as a timid Budget, and the right hon. Member for East Edinburgh has said—and he has repeated what has been said by other hon. Members—that this is a vindictive Budget. I hope that between those two criticisms I may come through all right. But there remains a fact which is often overlooked by the critics, and it is that the people of this country are shouldering very heavy burdens—I am now referring to all sections of the community—that have been imposed during a very short space of time. In all the criticisms that have been addressed to me, I have seen little or no recognition of what has been done, not by the rich alone, but by the rich and the poor and what may be called the middle sections of the community, during the last ten months.
It is worth repeating that in September last, when the first War Budget was presented, the total revenue from taxation and other sources was estimated to be £888,000,000. The other side of the picture is that in a full year, as a result of the September and April Budgets and this Budget the increase in the total revenue over the estimated sum of £888,000,000 may be put at £650,000,000; and that therefore, in that very short space of time, the revenue has been raised by nearly three-quarters to a total of £1,500,000,000. That is an astonishing figure. When people say that more ought to have been done, I often think they fail to recognise not only the tremendous amount that has been raised during a very short period, but also the necessity for giving a reasonable time for people to make adjustments to the new circumstances and conditions.
Again we have had the picture painted of the difficulties of people with £2,000


a year. My hon. and gallant Friend the Member for Wallasey (Lieut.-Colonel Moore-Brabazon) has spoken with great conviction and his views are entitled to respect. He has spoken of the difficulties of the man with £2,000 or £3,000 a year in regard to the heavy burden that has been placed upon him, and he is naturally apprehensive, and I am naturally apprehensive, not only of the £2,000 or £3,000 a year man, but of the £400 and £500 a year man to the extent that I want to give him an opportunity, in the position with which we are faced, to make the adjustments which are undoubtedly necessary. He asked what was the position of the Inland Revenue in cases such as he has given to the House; it is a difficult position indeed, and I have heard of many tragic cases during the last few weeks of people who, undoubtedly, have had to face a very serious situation. While it is the duty of the Inland Revenue to collect the tax charged, and to act firmly whenever a taxpayer is, without good reason, refusing to pay, or is being dilatory, it is not the policy of the Inland Revenue to be harsh and unsympathetic in cases where it is shown that the taxpayer has fallen on evil times, particularly if his struggles are due to the war, or to other circumstances which are quite beyond his control.
The collector will, in such circumstances, give the taxpayer reasonable time to pay, or allow the amount outstanding to be paid by instalments. Any taxpayer who finds himself in the position I have described should, in the first place, see the collector and place the facts before him, but if any of my hon. Friends know of any cases in this particular category or any other—I am not confining it to the higher ranges because there are just as many difficulties in the lower ranges, particularly in the case of a man with £400, £500 or £600 a year—in which discussion with a collector fails to arrive at some mutual understanding, then I hope they will communicate with me, and I will look into the matter. Where there is a case where payment ought to be made, then I must see it is paid.
My right hon. Friend has put before the House the position as it is to-day, and he has given some estimate in regard to future taxation. I should like to make

a statement to-night on this matter which is a matter of moment to the country at the present time. I think it can be said that it is inevitable that we cannot in wartime make financial plans for so long ahead as in peace-time, and also that we cannot frame our plans simply by referring to a financial year beginning on 1st April and ending on the following 31st March. In response to the suggestions which have been made in this connection, I should like to say to the House to-night that our financial arrangements must be continuously under review. The cost of the war effort will obviously depend from time to time on policy, on the course of military operations, and on the output of munitions of war, and the extent to which, at any stage, we meet that expenditure out of taxation must be a balance between the need for the greatest possible sacrifice by all taxpayers on the one hand, and, on the other hand, their ability for the time being to adjust their financial positions, including commitments of all kinds, to the increased demands made upon them.
I suggest that that is a reasonable presentation of the position, and it is not only a reasonable presentation, but if we do not take up this attitude we cannot get the greatest possible contribution from the taxpayers of the country. It is no good smashing people. You do not get revenue that way. This particular method, I suggest, is designed on the whole to obtain the greatest possible contributions possible. The considerations I have mentioned are not merely matters for 1940–41, but they are what I would describe as long-term factors. We only have one goal, in point of time, and that is the day when victory is secured. From now until then, whenever it may be, all our financial arrangements must be interim arrangements, and it was in that sense that I used the words in my Budget speech.
That further taxation has to be imposed is, obviously, inevitable, and the time at which this must be done must depend on the response to our appeals for Government loans, because on that response we depend not only for the financing of an appreciable proportion of our war expenditure, but also to a large degree for that restriction in civilian consumption which is our surest defence against the evils of inflation to which


my right hon. Friend has referred. If savings and lending do not contribute sufficiently to these objects, then the need for still higher taxation will correspondingly grow. I would only say in passing that it is, of course, in times like these impossible for me to make a fixed timetable. The shortness of the interval between the April and the July Budgets was quite exceptional, and need not necessarily be regarded as a precedent. I fully realise the uncertainty and inconvenience of interim Budgets. Take, for instance, the matter which my right hon. Friend has often emphasised—and I heard this long before I occupied my present position—the inconvenience that comes from frequent changes in the rate of Income Tax. I must have regard particularly to the important factors which I have mentioned, and to our general position, financial and economic, in the months between now and April.
I would like to add a word about what has been said by so many Members on the larger economic policy. I was in full agreement with my right hon. Friend when he indicated, as I indicate to-night, that the proposals of this Bill must be regarded as forming part of the larger economic policy, which was discussed in the Debate on the Appropriation Bill last week. Obviously the governing objects of that policy are to concentrate as large a portion as possible of our productive resources on increasing our fighting strength, to ensure adequate supplies of the necessaries of life, to maintain services that are vital to the civilian population and to maintain as far as possible our production for export. I am not permitted in the terms of our discussion to-night to emphasise that matter further. Anyone who has given a moment's consideration to our present problems must regard that as the most vital aspect.
At all times, in connection with the plans that we are framing and designing, we must have particularly in view the elimination of waste in Government expenditure. I have more especially in mind to-night war expenditure, but there is what I may call peace-time expenditure, namely, the expenditure which is necessary to keep running certain services which are not directly connected with the war. I think it can be said that a great effort has been made to reduce that expenditure to a minimum, not only by

specific measures taken to stop or reduce the scale of these activities, but also, indirectly by the concentration of personnel on war work and the shortness of supplies of many important materials which have to be directed to the services of highest priority. On war expenditure the primary need is to get value for money over the great range of services that have to be provided for. I can only assure the House to-night that we are endeavouring to keep constant watch in this important connection.
I turn to a subject which has given us a great deal of difficulty, namely the Purchase Tax. It is a tax imposed to meet the present situation and I can well understand that it would be vigorously opposed in normal circumstances. I acknowledge, at once, all that has been done by many hon. Gentlemen opposite in order to meet the present situation and to recognise the fact that we are at war and that money has to be obtained. On the other hand, I hope they recognise that I have endeavoured to meet them. I have made a considerable number of concessions and I hope that by that means I have eased the passage of the Bill. I would like to say a word about the tax from the point of view of what is to happen to bring it into operation and, I hope, to make it work smoothly and successfully. In the first place, I should like the country and the traders to recognise that this tax is to be administered by traders who are required to enter in their accounts their taxable transactions and to pay the tax. It is most important, therefore, that traders shall know precisely what are the taxable goods which are covered by the Schedule. I know that in many cases traders have no doubt of what is covered, but there are other groups where further guidance to traders must be given. We have met a very large number of trade associations, and I want to say that apart from discussing the merits of the tax, with which they were not concerned, they have shown a considerable amount of cooperation in trying to see that the tax shall be fairly and properly administered in order to produce the results designed.
The first step to be taken is registration. That will take some weeks and as soon as this Bill becomes law, a Regulation will be made fixing the date by which registration must be completed. I have


no doubt that the greater proportion of traders will readily register, but it should be known, by way not of threat, but of encouragement, that failure to register involves a penalty of £100, and a further penalty of £10 for each day during which the failure continues. The Board of Customs will be issuing to traders in a very short time now, an explanation of the Bill and of what they are required to do. In order to ensure that registration is completed rapidly, and that the tax can come into operation, application forms for registration will also be issued very shortly. At the beginning of next week we shall be sending many thousands of letters to traders, using the registrataion list of the Board of Trade, but, of course, the Purchase Tax covers far more traders than does the Board of Trade Restriction of Supply Order, and no doubt should be left, that the responsibility to register rests upon traders, under the penalties which I have mentioned. It would, of course, be a matter of consequence if the start of the tax should be delayed because registrations were seriously incomplete. Therefore, I appeal to traders to register, and I have no doubt that that appeal will be promptly met, because there is no doubt that all sections of the community wish to help our common cause at this time. With the co-operation of traders, it is hoped to bring the tax into operation at the beginning of October, and this will enable collection of the tax to be made conveniently at the end of the calendar year, when a very large number of traders make up their accounts, and a further collection of the tax will be made before the end of the financial year.
The last matter to which I want to refer relates to deduction of Income Tax at the source. It is the suggestion, one of the many which we always welcome, about payment of the money into an account. Under the arrangements which are contemplated, employers will be required to deduct the tax from wages and salary weekly or monthly, and forthwith to pay the money to the collector. Originally, but as a limiting date only, it was thought that the Inland Revenue would require all tax deducted in one month to be paid over by the middle of the following month. On considering the matter further, it seemed to us that that

amount of latitude might well be too great. Whether the tax be paid within seven days or fourteen days, which is the matter we are considering, there seems to be no object, if you can shorten the period, in the money being paid in any other way than directly to the collectors of taxes. It was understood that the idea behind the suggestion was that the money should be paid into a separate banking account so as to safeguard the Inland Revenue in the event of an employer's bankruptcy. If the account belonged to the employer it would not have to be paid over to the Treasury, and would have to be paid over to creditors in just the same way as any other banking account owned by the employer, but if the money were paid into an account in the name of the collector that would be the best course, provided it were properly done, rather than making a separate account.

Mr. Pethick-Lawrence: Does the suggestion mean that the collector should have one account in one bank in the town, or an account in each of the principal banks where the employers keep their money? There are certain advantages in having it within the limits of a single bank.

Sir K. Wood: . If you limit the period, you then safeguard the position greatly, and you avoid the suggestion that there should be some separate account. Provided that the money is promptly paid, or is paid reasonably soon, it is not so necessary to have the separate account.

Mr. Benson: A large number of employers have only one or two employés and their collections will be in pence or shillings a week. Are they to be compelled to pay very minor sums monthly and, if so, what steps are being taken to facilitate those payments? Are they to send a cheque every week?

Sir K. Wood: Cases of that kind will obviously need special consideration. Of course there is power to make an exemption, but where it would be of no benefit to employers, employés or to the State, then this exemption would not apply. [An HON. MEMBER: "Would it be done by stamps?"] We can consider what method should be adopted.
One last word on the Purchase Tax. Although this tax is distasteful in certain


quarters, I think at any rate it will have a good run, and it may well be that apart from bringing in a considerable revenue which I cannot otherwise collect at the present time, it would not, in fact, lead to the hardships which many hon. Members fear. As regards the suggestion that I should adopt new methods of taxation, it is rather a curious commentary to suggest that I should indulge in some imaginative flight. As my right hon. Friend has so often pointed out, although I may be accused of stony-heartedness, there is a good deal to be said for following those methods with which we are familiar, and adapting them to the circumstances of the times, so that they will be fair to all members of the community. I desire to thank my hon. Friends for all they have done to assist me in difficult times like these, to bring something into the Exchequer. I have noted all the suggestions that have been made. I have no doubt that some of them will be seriously considered with a view to adoption in future Budget proposals, and when that time comes, I hope hon. Members will not the backward in giving their support to the Chancellor of the Exchequer.

Question, "That the Bill be now read the Third time," put, and agreed to.

Bill read the Third time, and passed.

Orders of the Day — ISLE OF MAN (CUSTOMS) BILL.

Considered in Committee, and reported, without Amendment; read the Third time, and passed.

Orders of the Day — SUNDAY ENTERTAINMENTS ACT, 1932.

Resolved,
That the Orders made by the Secretary of State under the Sunday Entertainments Act, 1932, for extending Section one of that Act to the undermentioned areas, namely—

(1) the borough of Weston-super-Mare;
(2) the rural district of Mere and Tisbury (parishes of Mere and Tisbury);
(3)the urban district of Benfleet (parish of Hadleigh)

copies of which were presented to this House on 10th July;

(4)the urban district of Northwich;
(5) the rural district of Shaftesbury;
(6) the urban district of Clacton;
(7) the urban district of Bicester;
(8) the county borough of Halifax

copies of which were presented to this House on 30th July;


(9) the borough of Kidderminster;
(10) the borough of Cambridge;
(11) the borough of Guildford;
(12) the rural district of Dorking and Horley (parish of Horley)
copies of which were presented to this House on 13th August, be approved."—(Mr. Peake.)

The remaining Orders were read, and postponed.

Orders of the Day — REQUISITIONED MOTOR OMNI- BUSES, NORTHERN COMMAND.

Motion made, and Question proposed, "That this House do now Adjourn."—[Major Sir James Edmondson.]

9.42 p.m.

Mr. Benson: I wish to raise a matter which has been brought to my attention by the Chesterfield Town Council, relating to the prices being paid by the Northern Command for requisitioned buses. When I met a deputation at Chesterfield, of the town clerk, the transport manager, and one of the aldermen, I thought that I had seldom seen a more indignant deputation. I girded my loins together, expecting to have to defend the Government on the grounds that one must be economical in war-time, and that they should not expect too much for their buses. But I was astonished to find that what they were bitterly complaining about was not that they got too little, but that they got a great deal too much. They complained, broadly, that the price paid for a requisitioned 32-seater, single-decker bus was just about twice what it ought to be. The price paid by the Northern Command, including wages, is £2 10s. a day for a bus when standing, and £5 a day for a bus when running, the War Office to find the petrol and to make certain small payments which would cover insurance, etc., and the Corporation to maintain the bus.
On 12th July three buses of the Corporation were requisitioned, and they were held until 16th July. For that, the Corporation received £55. I asked the deputation what they ought to have received. The transport manager told me that he would have been well paid had he received half that figure; that if he had received £27 10s., that would have been all that he could reasonably have expected. I said, suppose that he had been paid on a mileage basis, for


what could he have run the buses? He said, "Excluding petrol, which the Government find, we could run our buses at 10d. a mile—or, to be on the safe side, let us say 1s. Those three buses have run 468 miles and, taking the higher rate, that would have worked out at £23 8s." The payment was £55. A reasonable lump sum payment on a day basis, the transport manager suggested, would have been £27 10s.; and, on a mileage basis, a reasonable payment would have been £23 8s.
He is a very able man, and I have a great respect for him, but I thought that on this occasion he must have slipped up with his figures. I could not believe that the War Office were paying twice as much as the hirers thought was necessary. So I took the trouble to check his figures. First, I asked the Manchester Corporation what they thought was a reasonable charge. I found that one could hire a 32-seater 49-horse-power Manchester Corporation bus, including the cost of petrol and driver, at 1s. 3d. a mile, with a minimum payment of £1. They do that as a normal commercial proposition. That checks up very closely with what the Chesterfield transport manager told me. I made further inquiries, and I found that not only the War Office but other Government Departments requisition or take over these large 32-seater single-deck buses. The Ministry of Health and the Admiralty require them, and they have worked out a scale, which they have considered and agreed with the Municipal Passenger Transport Association.
I will compare that scale with the scale paid by the Northern Command. The Ministry of Health and the Admiralty have slightly different scales, although in actual practice they are really the same. I propose to take the Admiralty scale, because it is rather simpler to comprehend, but in actual practice it works out almost to a penny to the same amount as the Ministry of Health scale of payment. For the same buses the War Office make daily payments, with some small payment also to cover insurance and third-party risks. Instead of paying £2 10s. and £5 according to the conditions under which the buses are running—the sliding scale depends upon the age of the bus, and they pay this scale whether the buses run or not—if it is a new bus, they pay

26s. a day, and, if it is an old bus, 18s. a day. They also pay for the petrol and wages and pay 1d. per mile for general running expenses. Supposing the Admiralty instead of the War Office had taken the Chesterfield buses, what would have been the payment that they would have made? If it had been a brand new bus, that is, within the first three years of life, they would have paid £26 19s., and if it had been a very old bus—and you can be sure that when buses are requisitioned corporations do not hand over new buses but very old ones—they would have paid £20 4s., and the average payment on these two figures would be £23 11s.
I think I am in a position to sum up. When the Northern Command and the War Office requisitioned three buses for four days, the Chesterfield Corporation would have been delighted with a payment of £27 10s., and had it been on a mileage basis they would have been amply repaid, according to their own calculation, if they had received £23 8s. Had they been paid upon the Admiralty basis, they would have received £23 11s. But the War Office paid them £55. That is a small amount, as it was not a very-big matter; it was only a small requisition. But during the same period buses were requisitioned from a large transport company which received a cheque for nearly £2,000, and buses have been requisitioned continuously from various transport companies as well as from corporations. A very larger number of buses are likely to be requisitioned if there is any trouble, and it is essential that the War Office should not be allowed to splash money about in this fantastic way, which even makes the recipients of the money ashamed to take it. Since I saw the deputation and they put these figures before me, I have received a letter from the Town Clerk of Chesterfield in which he states that there has been a variation in the price paid for buses. That variation is an increase of half-a-crown a day on the ground that the War Office were not paying enough. I hope that we shall get an explanation from the Financial Secretary of the fantastic and indefensible extravagance of the War Office.

9.50 p.m.

Sir Stanley Reed: May I make a very urgent appeal to the Financial Secretary not to treat this matter in


a cavalier manner? I hope he will not just ride off on the statement that the War Office had to have the buses quickly, because that we entirely accept. We can all appreciate the reasons which made the War Office demand the buses speedily. Not many minutes ago we listened to a very urgent declaration of policy from the Chancellor of the Exchequer in which he said it was the first business of the Treasury to secure that in war expenditure there should be the elimination of waste. He went on to assure the House that the Treasury would ensure that the State got value for money. The case which has been put by the hon. Member for Chesterfield (Mr. Benson) is perhaps more conclusive evidence than has ever been put before this House, that in this particular matter there has neither been elimination of waste nor has the State received value for money.
I know a little about motor transport and buses, and I say that the figure given by the hon. Member—is. a mile for 32-seater buses—is, if anything, on the liberal side. I know of transport companies which would be very glad to run buses of this character at that price. If you take the total figures, and assume these buses were of average age, at this rate the Government would pay the total cost of the vehicle, plus running expenses, about once a year. It is quite clear that there has been extraordinary carelessness in making arrangements for hiring these buses, and while making every allowance for the exigencies of the situation, which we appreciate, this slackness should not be tolerated. I ask the Financial Secretary not to treat this question as a small routine matter, because the effect of these extravagances is, to my mind, most disastrous to our war effort. It is completely demoralising and does induce the widespread feeling that while we are accepting higher taxation on every hand, there is no care in some Government Departments to secure that we get a reasonable return for the money which is being spent and which, indeed, the community is being hard pressed to provide.

9.53 p.m.

The Financial Secretary to the War Office (Mr. Richard Law): My hon. Friend the Member for Aylesbury (Sir S. Reed) need have no fear that I shall treat this matter in a cavalier or offhand manner. I quite agree that it is of the first im-

portance that there should be due economy in the spending of public money; otherwise it is extraordinarily difficult to justify the penal taxation which we have to endure at the present time. The hon. Member for Chesterfield (Mr. Benson) said that we had had a deputation from his borough council and that they were horrified by the charges which the War Office had insisted on paying. Well, I have not had the opportunity of examining this particular case, but I will certainly do so. But from what I have heard from my hon. Friend it is quite clear they have been charged by somebody something in excess of the rates which have been laid down by the Northern Command and I hope I shall be able to tell my hon. Friend what these rates are and convince him of that. However, if his local authority really do feel so strongly about it, I am quite certain that if they are brought into touch with me, there will be no difficulty at all about paying back some of the overcharge that has apparently been made.
I should like to explain the kind of difficulties that we have been up against. At the beginning of the war there was an arrangement in the Northern Command, and I think in other Commands, whereby an adequate number of motor coaches for our needs, as we thought, were car-marked for War Office use at 12 hours' notice. A register was compiled, and every vehicle on the register was available at 12 hours' notice at no cost to the War Office or the taxpayer except that of compiling the register. In May two things happened. In the first place, the B.E.F. returned from France and left a considerable amount—I need not be more specific—of motor transport behind. That meant that the Northern Command, and other Commands, needed a far greater number of motor coaches, and the system of earmarking was not sufficient, because they needed more coaches than were available in the Northern Command, and they had to get them from a distance. The other thing that happened was that we were faced with a threat of imminent invasion, and when I say imminent invasion I mean just that. It was not possible after the B.E.F. returned just to have the troops there and leave the motor coaches at the end of a telephone 10, 20 or 100 miles away. You could not count upon


having 12 hours' notice to get them. You could not wait to get the coaches until the invasion took place. You had to have them on the spot with the troops. It is true, broadly speaking, that they were lying idle, eating their bonnets off, with nothing to do, but that was not extravagance on the part of the War Office; it was not the fault of the War Office. The only reason why they were lying idle is that the invasion has not in fact taken place. But that does not mean, when the mobility of troop movements was the prime consideration, that the War Office was foolish or extravagant to have the motor coaches there. It had to have them.

Mr. Benson: I was not complaining that the buses were requisitioned or were lying idle, but that the rate paid for them was twice the Admiralty scale and twice the normal hire scale, and that the rate when buses are lying idle is nothing like so great as when they are running.

Mr. Law: I was just giving my hon. Friends some idea of the background against which we had to work. I will now endeavour to satisfy my hon. Friends as to the rates that we were paying. Under the arrangements I have described we were to pay a flat rate of £5 a day. We assumed that they would be running hard every day they would be working, and we thought that in those conditions £5 a day was not an unfair rate, and I do not think it was. When it became a question of buses for standing by, that £5 a day was reduced to 30s., which again is not unreasonable if you consider that one of the largest coach operators in the country calculates that a single decker has to earn 26s. 3d. a day to cover depreciation and overheads while standing in the garage. In addition to that, we made a charge of £4 a day when the coach was running—not in addition to the 30s., but including it. It was very difficult in the abstract to know what kind of use these buses would be put to. Recently we have again modified the rates. We have the 30s. a day standing-by charge, 10s. for the first 10 miles and 7d. a mile after that. My hon. Friend said that 1s. a mile was a fair charge, so I do not think he can complain that 7d. a mile is such a very high charge.
My hon. Friend also said that our scale compared unfavourably with the

scales adopted by the Admiralty, and I think he said by the Ministry of Health. He quoted the Admiralty scales, and he said that for new buses it was 26s. a day and for old buses 18s. a day. But he did not point out that the 26s. a day was for buses, one, two and three years old, and that the 18s. was for buses 11, 12, 13 and 14 years old. That, however, is the position. I can assure my hon. Friend that the War Office have not taken so many buses of 11, 12 and 13 years old. In fact, I doubt whether they have many older than three years. In the circumstances, considering the speed with which these buses had to be hired, the administrative complications of having a sliding scale for buses for an Army that might be called upon to move at any time were very great, and the saving would be small compared with the administrative work that would be involved.
The hon. Member for Aylesbury (Sir S. Reed) said it would have been much cheaper to buy the buses outright. Of course, it would have been very much better to have bought them outright as things turned out, and we would have done so had it been possible. We had power to buy the buses, but we had no power to buy drivers, and the position was that when the British Expeditionary Force came back from France, we wanted the buses, but we could not get drivers until the organisation of the B.E.F. was completed, and we had sorted out the various units, tradesmen, and so on. Therefore, in the meantime, we had to hire the buses by negotiation, and to have buses and drivers together. It was no use having the buses and not getting the drivers. I think we did it without unfairness to the taxpayers or to the owners of the buses, although I ought to tell the House that we have had many more complaints from the owners of the buses as to the lowness of the rates paid than we have had as to the highness of the rates. Eventually, the B.E.F. was sorted out and the drivers were available, and when that happened we immediately began purchasing these coaches according to the procedure laid down by the House. We have already purchased outright two-thirds of the coaches which we requisitioned, and that process is being completed as rapidly as possible. I hope that in view of what I have said the hon. Member will feel at any rate that the War


Office have taken thought on this matter. I will gladly look into the instance which the hon. Member has given, although it seems to be extremely odd in view of the rates complained of; but I hope I have convinced hon. Members that we have taken this matter seriously and that these widespread allegations of waste of public money are not justified.

Mr. James Griffiths: Will the hon. Gentleman explain to us the tremendous discrepancy between the rates paid by the Admiralty, the Ministry of Health, and the War Office? All these Government Departments have to requisition buses and similar vehicles for essential work. Has there been any consultation as to what would be a fair rate? No doubt the Ministries often requisition buses from the same firms, and those firms may get different rates from different Ministries, and in that case they must get a very bad impression of the business efficiency of the Government. Is there any co-ordination of any kind? There is a further point I want to raise. I gather that the War Office are now, very sensibly, purchasing these buses. Is the purchase price fixed by the War Office on the basis of the extravagant rate paid for hiring? If so, it may not be of much advantage to the State to purchase these vehicles.

Mr. Law: With regard to the hon. Member's first point, I cannot speak for the other Departments, but we arrange our rates of hiring in consultation with the Regional Traffic Commissioners of the

Ministry of Transport. I assume that the other Departments do so, too. Certainly, it is very important that the different Ministries should not pay different prices. I would, however, point out that it is extraordinarily difficult to have a uniform hiring rate throughout the country for a variety of reasons, partly because the tactical purposes for which the buses are needed vary from one place to another, and partly because of the normal use to which the buses are put. In some places the buses may be laid up for all but two or three months in the year, whereas in other places they may be busy every day of the year. With regard to the rates of purchase, the rates are fixed at the War Office valuation, and if there is a dispute it goes to arbitration. I think the hon. Member can rest assured that the rates that are being paid are not extravagant. They are paid in consultation with the Regional Traffic Commissioners. There is a good number of disputes on the part of the people from whom we are purchasing because they think the rate is too low. There is every evidence that the rate we are paying in making purchases is a reasonable one.

Question, "That this House do now adjourn," put, and agreed to.

Adjourned accordingly at Eleven Minutes after Ten o'Clock until Tuesday next, pursuant to the Resolution of the House this day.